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62d Congress') 
2d Session f 


SENATE 


Document 
No. 789 


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CASES BROUGHT IN THE 
COMMERCE COURT 

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LETTER FROM THE ATTORNEY GENERAL 

TRANSMITTING 


IN RESPONSE TO SENATE RESOLUTION OF JUNE 10, 1912, 
INFORMATION RELATIVE TO THE CASES BROUGHT 
IN THE UNITED STATES COMMERCE COURT 1 


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June 12, 1912.—Ordered to lie on the table and to be printed 





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WASHINGTON 

GOVERNMENT PRINTING OFFICE 
1912 











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62d Congress 1 
2d Session J 


SENATE 


f Document 
\ No. 789 


CASES BROUGHT IN THE 
COMMERCE COURT 


LETTER FROM THE ATTORNEY GENERAL 


TRANSMITTING 

IN RESPONSE TO SENATE RESOLUTION OF JUNE 10, 1912, 
INFORMATION RELATIVE TO THE CASES BROUGHT 
IN THE UNITED STATES COMMERCE COURT 


JUNE 12, 1912.—Ordered to lie on the table and to be printed 


WASHINGTON 

GOVERNMENT PRINTING OFFICE 
1912 

















JIJW L . mo 


Department of Justice, 

Office of the Attorney General, 

Washington , D. C., June 11, 1912. 
To the President of the Senate. 

Sir: Pursuant to the request of the Senate con¬ 
tained in resolution adopted June 10, 1912, I have 
the honor to transmit herewith the following papers: 

1. Statement of all cases brought in the United 
States Commerce Court, together with summary of 
questions of law and of fact decided in each, with 
date of commencement of each case and the decision 
of the court thereon. 

2. List of cases pending in the United States 
Commerce Court on June 11, 1912. 

3. List of cases appealed from the United States 
Commerce Court to the Supreme Court, and the dis¬ 
position or status of each. 

4. Complete set of opinions of the United States 
Commerce Court. 

Very respectfully, 

Geo. W. Wickersham, 

Attorney General . 

3 


4 


CASES BROUGHT IN’ THE COMMERCE COURT. 


STATEMENT OF ALL CASES BROUGHT IN THE UNITED 
STATES COMMERCE COURT, TOGETHER WITH SUM¬ 
MARY OF QUESTIONS OF LAW AND OF FACT DECIDED 
IN EACH, AND DATE OF COMMENCEMENT OF EACH 
CASE AND THE DECISION OF THE COURT THEREON.— 
JUNE 11, 1912. 

No. 1. Southern Pacific Company et at. v. Interstate 
Commerce Commission , commonly known as the 
“San Francisco switching case.” 

The Interstate Commerce Commission entered an 
order requiring the carriers to desist from exacting 
their switching charge of $2.50 for deliveries on side¬ 
tracks at San Francisco where private industries are 
located, in instances where such deliveries were made 
by the carrier which hauled the traffic to San Fran¬ 
cisco from points outside the State of California. 
June 1, 1910, the carriers filed a bill in the Circuit 
Court of the United States for the District of Kansas, 
supported by affidavits. An answer was filed to the 
bill. February 8, 1911, the case was transferred to 
the Commerce Court. April 5, 1911, the United 
States, after having intervened, filed a motion to 
dismiss, which was argued and submitted on printed 
briefs. The Santa Fe Co. claimed that if the order 
of the commission were enforced, it would sustain a 
loss of approximately $40,000 a year. The Southern 
Pacific Co. claimed that if the order of the commission 
were enforced, it would sustain a loss of approxi¬ 
mately $70,705 a year. July 20, 1911, the Commerce 
Court (Judge Mack dissenting) handed down its 
opinion holding the order of the commission errone¬ 
ous because (1) the industrial or spur track service 


CASES BROUGHT IN THE COMMERCE COURT. 


5 


of railway companies in making deliveries to and 
from industries located on their lines was a service 
different from that rendered by them in making 
deliveries to and from the public team tracks; and 
(2) the general tariff charge for the transportation of 
freight to San Francisco did not pay for the delivery 
of such freight over their rails to the industrial 
plants and that the carriers were entitled to make 
additional charges for such deliveries. Thereupon 
the court entered its order granting the motion for 
a preliminary injunction and denying the motion of 
the United States to dismiss the bill. August 18, 
1911, an appeal was taken to the Supreme Court 
from this order and the cause was docketed Septem¬ 
ber 22, 1911. 

No. 2. Atchison , Topeka and Santa Fe Railway Com¬ 
pany et al. v. Interstate Commerce Commission , 
commonly known as the “ Los Angeles switching 
case/’ 

The Interstate Commerce Commission entered its 
order requiring the carriers to desist from exacting 
their switching charge of $2.50 for deliveries on side¬ 
tracks at Los Angeles where private industries are 
located, in instances where such deliveries were made 
by the carrier which hauled the traffic to Los Angeles 
from points outside of the State of California. June 
1, 1910, the carriers filed a bill in the Circuit Court of 
the United States for the District of Kansas, sup¬ 
ported by affidavits. An answer was filed to the bill. 
February 8, 1911, the case was transferred to the 
Commerce Court. April 5, 1911, the United States, 


6 CASES BROUGHT IN THE COMMERCE COURT. 

after having intervened, filed a motion to dismiss, 
which was argued and submitted on printed briefs. 
The Southern Pacific Co. claimed that if the order 
of the commission were enforced, it would sustain a 
loss of approximately $84,430 a year. The Santa 
Fe Co. claimed that if the order of the commission 
were enforced, it would sustain a loss of approxi¬ 
mately $60,000 a year. On July 20, 1911, the 
Commerce Court (Judge Mack dissenting) handed 
down its opinion, holding the order of the commission 
erroneous because (1) the industrial or spur track 
service of railway companies in making deliveries to 
and from industries located on their lines was a 
service different from that rendered by them in mak¬ 
ing deliveries to and from the public team tracks; 
and (2) the general tariff charge for the transporta¬ 
tion of freight to Los Angeles did not pay for the 
delivery of such freight over their rails to the indus¬ 
trial plants, and that the carriers were entitled to 
make additional charges for such deliveries. There¬ 
upon the court entered its order granting the motion 
for a preliminary injunction and denying the motion 
of the United States to dismiss the bill. On August 
18, 1911, an appeal was taken to the Supreme Court 
from this order, and the cause was docketed Septem¬ 
ber 22, 1911. 

No. 3. Atlantic Coast Line R. R. Company et al. v. 
Interstate Commerce Commission , commonly known 
as the “ Kiser boot and shoe case/* 

The Interstate Commerce Commission reduced the 
rate on boots and shoes from New England points to 


CASES BROUGHT IN THE COMMERCE COURT. 7 

Atlanta, Ga., March 31, 1910; the carriers filed a bill 
in the United States Circuit Court for the Eastern 
District of Virginia, seeking to set aside the order of 
the commission on the ground that the reduced rates 
were confiscatory, that the commission exceeded its 
power, and that heavy losses would be sustained. 
No injunction was issued. February 14, 1911, the 
case was transferred to the Commerce Court. Octo¬ 
ber 3, 1911, the case was argued and submitted on a 
motion of the United States to dismiss, a demurrer 
of the intervener, and an answer of the Interstate 
Commerce Commission. December 5, 1911, the 

Commerce Court filed its opinion, sustaining the 
objections to the bill and gave leave to amend. 
February 3, 1912, an amended petition was filed, 
issues were joined, and the evidence was taken. 
June 4, 1912, on motion of the petitioners, the cause 
was dismissed, the order of the commission having 
expired. 

No. 4. Louisville and Nashville Railroad Company v. 

Interstate Commerce Commission. 

April 15, 1910, the Interstate Commerce Commis¬ 
sion ordered a reduction in certain class rates from 
New Orleans to Montgomery and Selma; from New 
Orleans to Mobile; and from New Orleans to Pensa¬ 
cola. January 26, 1910, a bill was filed in the Cir¬ 
cuit Court of the United States for the District of 
Kentucky, seeking to enjoin and set aside the order 
alleging that the evidence taken by the commission 
was insufficient to support the order it had entered. 
April 9, 1910, the circuit court refused to grant a 


8 CASES BROUGHT IN THE COMMERCE COURT. 

preliminary injunction. Issues were joined and the 
testimony was taken. After the testimony had been 
taken the case was transferred to the Commerce 
Court. April 3, 1911, the United States intervened, 
adopted the answer of the Interstate Commerce 
Commission, and the case was argued and submitted 
on printed briefs. It was claimed that if the order 
of the commission were sustained the loss to the 
company would approximate $260,000 a year. Feb¬ 
ruary 28, 1912, the Commerce Court (Judge Mack 
dissenting) filed its opinion, holding the order null 
and void for lack of sufficient evidence before the 
commission to sustain it. March 7, 1912, final decree 
was entered annulling the order of the commission 
and permanently enjoining the same. March 16, 
1912, an appeal to the Supreme Court was allowed 
and the cause has been advanced for hearing in 
October, 1912. 

No. 5. James J. Hooker et al. v. Martin A. Knapp 

et al. 

No. 6. The Eagle White Lead Company et al. v. 

Interstate Commerce Commission et al. 

February 17, 1910, the Interstate Commerce Com¬ 
mission ordered a reduction in the rates for the trans¬ 
portation of certain articles mentioned in the southern 
classification from Cincinnati, Ohio, to Chattanooga, 
Tenn. The complainants before the commission were 
dissatisfied with the amount of the reduction and 
filed a bill in the Circuit Court of the United States for 
the Southern District of Ohio, seeking to suspend and 
set aside the order of the commission, and to direct the 


CASES BROUGHT IX THE COMMERCE COURT. 9 

commission to reopen and to rehear the case and to 
r rder further reductions in the rates, claiming that the 
commission erred in considering the rates via lines 
other than the shortest line between the two points. 
The commission and certain railroad companies filed 
demurrers to the bill. February 15, 1911, the cases 
were transferred to the Commerce Court. April 3, 
1911, the United States was permitted to intervene 
and make its defense. May 2, 1911, the United 
States filed a motion to dismiss the cause for want of 
jurisdiction, because an unsuccessful complainant 
before the Interstate Commerce Commission was 
without right to maintain a suit in court to revise the 
action and order of the commission. July 20, 1911, 
the Commerce Court filed its opinion unanimously 
overruling the motion to dismiss for want of juris¬ 
diction over the cause. The court then entered 
orders dismissing the bills. It reversed the order and 
sustained the commission on the merits, Judges 
Archbald and Mack dissenting. 

The complainants appealed to the Supreme Court, 
and the appeals were advanced for argument and 
heard on January 8, 1912. On June 7, 1912, the 
Supreme Court reversed the order of the Commerce 
Court and directed the dismissal of the bills for want 
of jurisdiction in the court to entertain the same. 

No. 7. Atchison , Topeka and Santa Fe Railroad Com¬ 
pany v. Interstate Commerce Commission , commonly 
known as the “ Lemon rate case.” 

June 11, 1910, the commission ordered the rate on 
lemons shipped from southern California to all points 


10 CASES BROUGHT IN' THE COMMERCE COURT. 

east of the Rocky Mountains reduced from $1.15 per 
100 pounds to $1 per 100 pounds. September 7, 1910, 
the railroad companies filed a bill in the Circuit Court 
of the United States for the district of Kansas, sup¬ 
ported by affidavits, alleging, inter alia, that the order 
was null and void in that it was made and entered 
by the commission for the sole purpose of protecting 
the growers of lemons of southern California against 
the competition of the growers of lemons of Sicily. 
October 10, 1910, the commission filed its answers. 
October 27, 1910, a temporary restraining order was 
issued. February 16, 1911, the case was transferred 
to the Commerce Court. April 3, 1911, the United 
States intervened and on April 6,1911, filed its answer. 
The case was then argued and submitted on printed 
briefs. October 5, 1911, an opinion was filed by the 
Commerce Court and an order was entered setting 
aside the order of the Interstate Commerce Commission 
and permanently enjoining the same without preju¬ 
dice to the commission, to rehear the case, and to 
enter another order, which was done. (See No. 61.) 
No appeal was taken. 

No. 9. The Proctor and Gamble Company v. United 

States. 

December 14, 1910, the Interstate Commerce Com- 
misson sustained the rule and regulation of certain 
western railroad companies providing for the assess¬ 
ment and collection of demurrage charges on private 
cars on private tracks of the owners while the same 
were under lading and dismissed the complaint of the 
Proctor & Gamble Co. before the commission attack- 


CASES BROUGHT IN THE COMMERCE COURT. 


11 


ing that rule and regulation. February 22, 1911, 
the Proctor & Gamble Co. filed a petition in the 
Commerce Court against the United States to set 
aside the order of the commission and sought to have 
the Commerce Court hold that the rule and regula¬ 
tion was void in that it deprived the company of its 
property without due process of law, was beyond the 
power of the commission, and to award a large sum 
as reparation claimed to have been paid by the 
Proctor & Gamble Co. to the carriers. Eight rail¬ 
road companies were also made parties respondent 
to the petition, and the commission intervened. The 
United States filed a separate motion to dismiss the 
cause for want of jurisdiction, on the ground that 
the action of the commission in dismissing the com¬ 
plaint of the Proctor & Gamble Co. directed no 
affirmative relief of any kind, but was a mere negative 
order and the Commerce Court was without power 
to consider or review the same, and the action of the 
commission was final. The Interstate Commerce 
Commission filed a motion to dismiss on the merits. 
The railroad companies answered the petition. April 
13, 1911, argument was had on the motions. Sub¬ 
sequently the court tentatively overruled the motions 
and directed the case to be heard on its merits. The 
evidence taken before the commission was stipulated 
into the case and the motions to dismiss renewed, the 
United States standing on its motion to dismiss for 
want of jurisdiction. May 11, 1911, the case was 
argued on its merits and submitted on briefs. July 20, 
1911, an opinion was filed and an order entered dis- 


12 


CASES BROUGHT IN THE COMMERCE COURT. 


missing the petition at the cost of the petitioner. 
The Commerce Court took full jurisdiction of the 
cause and after reviewing the action of the Com¬ 
mission held its order was right. On August 10, 1911, 
the petitioner appealed to the Supreme Court, and the 
case was advanced for hearing on January 8, 1912. 
June 7, 1912, the Supreme Court sustained the motion 
of the United States to dismiss, reversed the order of 
the Commerce Court in taking jurisdiction over the 
cause, arid remanded the case to the Commerce 
Court with directions to dismiss the petition. 

No. 15. United States v. Union Stock Yard and 

Transit Company, et at. 

This was an original suit filed by the United States in 
the Circuit Court for the Northern District of Illinois 
seeking to have declared the Union Stock Yard & 
Transit Co., which owned a railroad, and Chicago 
Junction Railway Co., which operated the said rail¬ 
road, as common carriers subject to the act to reg¬ 
ulate commerce and to compel them as such to file 
tariffs showing their rates and charges, and to enjoin 
them from transacting business until they filed such 
tariffs; and further, to enjoin the Stock Yard Co. 
from entering into and executing a certain contract 
by which it sought to pay a certain packing house 
company $50,000 as a bonus to keep and maintain 
its slaughtering business in the stock yards. Answers 
were filed and on March 4, 1911, the case was trans¬ 
ferred to the Commerce Court. May 19, 1911, it was 
argued and submitted on briefs. Mr. Guthrie, chief 
counsel for the defendants, stated in open court that 


CASES BROUGHT IN THE COMMERCE COURT. 13 

the success of the Government in the case would 
practically disrupt a business of his clients worth 
approximately $30,000,000. November 14, 1911, the 
Commerce Court filed its opinion, holding that the 
Chicago Junction Railway Co., which operated the 
railroad, was a common carrier by railroad subject to 
the acts to regulate commerce and ordered it to 
publish and file tariffs of its rates and charges within 
sixty days; that the U. S. Y. & T. Co., the owner of 
the railroad, was not a common carrier, and that the 
Commerce Court was without jurisdiction to deter¬ 
mine whether or not the alleged transaction between 
the Stock Yard Co. and the packing-house company 
was in violation of the acts to regulate commerce, 
and dismissed the petition as to all respondents except 
the C. J. Ry. Co. March 9, 1912, both sides appealed 
to the Supreme Court and the cause has been ad¬ 
vanced for hearing in October, 1912. 

No. 18. Russe and Burgess et al. v. Illinois Central 

Railroad Company et al. 

No. 19. J. W. Thompson Lumber Company et al. v. 

Interstate Commerce Commission. 

In these cases the shippers had filed complaints 
before the Interstate Commerce Commission attack¬ 
ing certain rates on lumber. The commission re¬ 
duced the rates in accordance with the complaints 
and denied reparation on previous shipments. Sep¬ 
tember 22, 1909, suits were commenced by the 
shippers in the United States Circuit Court at Chicago, 
seeking to set aside that part of the order denying 
the reparation. The defendants filed demurrers to 


14 


CASES BROUGHT IN THE COMMERCE COURT. 


the bills. March 4, 1911, the cases were transferred 
to the United States Commerce Court and the United 
States filed motions to dismiss for want of jurisdic¬ 
tion as in the Procter and Gamble case (No. 9) and 
the Hooker (No. 5) and Eagle White Lead (No. 6) 
cases. These motions were argued April 3, 1911, 
and submitted on briefs. The motions were tenta¬ 
tively overruled by the court, who directed that the 
cases be heard on their merits. On October 26, 1911, 
the cases were argued on their merits and submitted. 
February 13, 1912, the Commerce Court filed its 
opinion, assuming jurisdiction of the cause, and hold¬ 
ing that the commission erred in not awarding repa¬ 
ration on shipments which moved previous to the 
filing of the complaint. The cases have remained on 
the calendar without further action. The motions 
to dismiss for want of jurisdiction will be renewed, 
on the authority of the Procter & Gamble case and 
the Hooker and Eagle White Lead cases. 

No. 20. Chicago , Rock Island and Pacific Railway v. 

Interstate Commerce Commission , commonly known 

as the “ Greater Des Moines case.” 

June 25, 1909, the Interstate Commerce Commis¬ 
sion entered an order requiring petitioner to put into 
effect on or before September 1, 1909, certain pro¬ 
portional rates from Rock Island, Ill., to Des Moines, 
Iowa, applicable on through traffic originating east 
of the Indiana-Illinois State line. October 14, 1909, 
the petitioner filed its complaint before the United 
States Circuit Court, Northern District of Illinois, 
charging that the rates so reduced were confiscatory 


CASES BROUGHT IN THE COMMERCE COURT. 


15 


and would reduce its revenues many thousands of 
dollars annually. No motion for preliminary injunc¬ 
tion was made and no hearing was had. November 
19, 1909, the Interstate Commerce Commission filed 
a demurrer. March 4, 1911, the case was transferred 
to the Commerce Court. April 3, 1911, the United 
States intervened, and on May 2, 1911, filed a motion 
to dismiss. No further action was taken until April 
18, 1912, when, on motion of the petitioner, the cause 
was dismissed, the order of the commission having 
expired. 

No. 21. Goodrich Transit Company v. Interstate Com¬ 
merce Commission. 

No. 22. Goodrich Transit Company v. Interstate Com¬ 
merce Commission. 

The Interstate Commerce Commission entered or¬ 
ders requiring water-line carriers to report to the 
commission, on blanks furnished by it, figures of all 
business conducted by the water-line carriers, both 
interstate and intrastate. The Goodrich Transit 
Company filed bills in the Circuit Court of the United 
States for the Northern District of Illinois attacking 
that order on the ground that it was void in that it 
did not distinguish between interstate business and 
intrastate business and port-to-port business, not 
over a through route with a joint rate, and alleging 
that the intrastate business and port-to-port business 
not over a through route with a joint rate were sub¬ 
jects into which the commission might not inquire. 
The circuit court granted a stay of the order entered 
by the commission. March 6, 1911, the cases were 


16 


CASES BROUGHT IN THE COMMERCE COURT. 


transferred to the Commerce Court. April 4, 1911, 
the United States, having intervened, filed its an¬ 
swer. The commission filed a motion to dismiss. 
The latter was argued by counsel for the United 
States and counsel for the commission and submitted 
on printed briefs. October 5, 1911, the Commerce 
Court filed its opinion, holding null and void the 
orders of the commission and permanently enjoined 
the same on the ground that the commission had no 
power or authority to acquire knowledge and infor¬ 
mation concerning the purely intrastate business or 
the port-to-port business of water-line companies. 
November 11, 1911, appeals were taken to the Su¬ 
preme Court and the causes were advanced and ar¬ 
gued in February, 1912. April 1, 1912, the Supreme 
Court reversed the judgments of the Commerce Court 
and remanded the cases with directions to dismiss the 
petitions, holding that when common carriers engage 
in commerce among the several States, however slight 
the extent, the commission is entitled to full knowl¬ 
edge and information concerning their entire business, 
both interstate and intrastate, as well as port-to-port, 
and that the reports prescribed and the orders made 
were entirely within its power. 

No. 23. White Star Line, Petitioner, v. United States. 
No. 24. White Star Line, Petitioner, v. United States. 

These cases are similar to Nos. 21 and 22, except 
the petitions alleged that the orders of the com¬ 
mission sought to embrace reports of the private 
business of water-line companies, such as the conduct 


CASES BROUGHT IN THE COMMERCE COURT. 17 

of an amusement park and the sale of confections, 
etc., therefrom, etc. They were companion cases to 
Nos. 23 and 24, were heard with them and came to the 
same result. 

No. 25. Omaha and Council Bluffs Street Railway 

Company v. Interstate Commerce Commission. 

April 27, 1909, the Interstate Commerce Commis¬ 
sion ordered the passenger fare of 15 cents between 
Council Bluffs, Iowa, and Omaha, Nebraska, and from 
Omaha, Nebraska, to Council Bluffs, Iowa, reduced to 
10 cents. February 7, 1910, the company filed a bill 
in the Circuit Court for the District of Nebraska seek¬ 
ing to enjoin the order of the commission, on the 
ground that the railway company was an interurban 
traction company and not a common carrier by rail¬ 
road within the meaning of the act to regulate com¬ 
merce and therefore not within the jurisdiction of the 
commission. March 3, 1910, the commission filed 
its demurrer and answer. April 25, 1910, the circuit 
court granted a temporary injunction against the 
order of the commission, and held that the railway 
company was not a common carrier by railroad 
subject to the act to regulate commerce. March 6, 
1911, the case was transferred to the Commerce 
Court. May 2, 1911, the United States intervened 
and joined in the demurrer and answer of the Inter¬ 
state Commerce Commission. The case was then 
heard on bill, demurrer, and answ T er, and taken under 
advisement. October 13, 1911, the Commerce Court 
filed its opinion, holding the common carrier subject 

48250—S. Doc. 789, 62-2-2 


18 


CASES BROUGHT IN THE COMMERCE COURT. 


to the law, and on October 13, 1911, entered its order 
sustaining the demurrer and dismissing the bill. 
October 23, 1911, the petitioner appealed to the 
Supreme Court, and the case was argued in January, 
1912. No opinion has been filed by the Supreme 
Court. 

No. 31. Pennsylvania Railroad Company v. Interstate 
Commerce Commission. 

October 4, 1910, a bill was filed in the Circuit Court 
for the Eastern District of Pennsylvania, attacking 
an order of the commission, regulating the distribu¬ 
tion of coal cars to certain mines within the State of 
Pennsylvania. To certain parts of the bill the 
commission demurred and to other parts it answered. 
March 8, 1911, the cause was transferred to the 
Commerce Court. April 3, 1911, the United States 
was permitted to intervene and defend. May 2, 

1911, the United States adopted the demurrer and 
answer of the Interstate Commerce Commission. 
October 11, 1911, the case was argued and submitted. 
December 5, 1911, the Commerce Court filed its 
opinion holding that the questions presented were 
matters of fact foreclosed by the findings of the com¬ 
mission and dismissed the petition. February 10, 

1912, the petitioner appealed to the Supreme Court, 
where the cause is now pending. 

No. 32. Southern Pacific Company v. Interstate Com¬ 
merce Commission. 

No. 33. Southern Pacific Company v. Interstate Com¬ 
merce Commission. 


CASES BROUGHT IN THE COMMERCE COURT. 19 

No. 34. The Atchison, Topeka and Santa Fe Railroad 
Company v. Interstate Commerce Commission. 

In these cases the carriers, on November 15, 1910, 
filed bills, supported by affidavits, in the Circuit Court 
of the United States for the Northern District of 
California, seeking to set aside an order of the com¬ 
mission ordering a reduction in certain transcon¬ 
tinental rates. November 23, 1910, the court denied 
the application for temporary injunction. January 
16, 1911, the commission filed its answer. March 14, 
1911, the cases were transferred to the Commerce 
Court. April 18, 1912, on motion of the petitioners, 
the cases were dismissed. The Commerce Court took 
no action in any of the cases other than to dismiss the 
same. 

No. 35. Denver and Rio Grande Railroad Company v. 
Interstate Commerce Commission. 

The Interstate Commerce Commission reduced the 
rate on beer from St. Louis, Mo., to Denver and other 
points in Colorado from 45</* to 30/* per hundred 
pounds. December 24, 1909, a bill was filed in the 
Circuit Court of the United States for the District of 
Colorado to set aside the order of the commission. 
January 24, 1910, the answer of the commission was 
filed. March 20, 1911, the case was transferred to 
the Commerce Court, a motion for a preliminary 
injunction having been denied. November 4, 1911, 
the evidence was taken. February 12, 1912, the 
cause was argued and submitted. On April 9, 1912, 
the Commerce Court filed its opinion and directed a 


20 CASES BROUGHT IN THE COMMERCE COURT. 

dismissal of the petition, holding that traffic moving 
from St. Louis, Mo., to Leadville, Colo., did not lose 
its interstate character between Pueblo and Lead¬ 
ville, points within the same State, because the 
freight was billed from St. Louis to Pueblo, and upon 
arrival there was put into a new train and rebilled 
from Pueblo to Leadville. 

No. 36. Atchison , Topeka and Santa Fe Railway Com¬ 
pany et al. v. United States. 

Prior to August 1, 1910, the rate on lumber from 
certain points in Mississippi and other southern 
points to Lincoln, Omaha, Council Bluffs, and Des 
Moines was 26.5 cents. June 2, 1910, the commis¬ 
sion reduced the rate to 25 cents. March 30, 1911, 
the railroad companies filed a petition in the Com¬ 
merce Court seeking to enjoin and set aside the 
order of the commission, and moved for a preliminary 
injunction on the ground that the rate prescribed by 
the commission was too low and confiscatory. April 
11, 1911, the United States filed a motion to dismiss, 
as did also the commission, and the same were 
argued with the motion for the temporary injunc¬ 
tion and submitted on briefs. May 29, 1911, the 
Commerce Court entered an order denying the 
motion for a temporary injunction, and on the same 
day entered an order overruling the motions to dis¬ 
miss, with leave to the United States to answer 
within 20 days. October 18, 1911, the court granted 
leave to the petitioners to amend their bill. Novem¬ 
ber 29, 1911, an amended petition was filed and 


CASES BROUGHT IN THE COMMERCE COURT. 21 

issues were joined. February 6, 1912, the Commer¬ 
cial Club of Omaha intervened. April 9, 1912, on 
stipulation of the parties the cause was dismissed at 
the cost of the petitioners. 

No. 38. The Baltimore & Ohio Railroad Company et 

al. v. United States , commonly known as the “New 

York lighterage case.” 

December 5, 1910, the commission entered an order 
in Federal Sugar Refining Company v. Baltimore and 
Ohio Railroad Company et al., No. 2888, directing 
seven railroad companies to cease and desist from 
paying allowances to Arbuckle Bros, on their sugar, 
delivered to the said railroad companies at their ter¬ 
minals on the Jersey shore by Arbuckle Bros., while 
at the same time paying no such allowances to the 
Federal Sugar Refining Co. on its sugar delivered by 
it to the said railroad companies at their terminals on 
the Jersey shore, which practice was found to be 
unduly discriminatory and in violation of the act to 
regulate commerce. April 13, 1911, the seven rail¬ 
road companies filed their petition in the Commerce 
Court seeking to annul and set aside the order of the 
commission and moved for a preliminary injunction. 
Notice was given that they would apply for such pre¬ 
liminary injunction on May 17, 1911. Subsequently 
John Arbuckle and William A. Jamison, as Arbuckle 
Bros., filed a petition setting forth their interest in 
the case and served notice that on May 17, 1911, they 
likewise would apply for a preliminary injunction. 
The Brooklyn Eastern District Terminal, a corpora¬ 
tion, also filed an intervening petition and served 


22 


CASES BROUGHT IN THE COMMERCE COURT. 


notice that on May 17, 1911, it likewise would apply 
for a preliminary* injunction. The Federal Sugar Re¬ 
fining Company intervened. The United States filed 
a motion to dismiss, and the commission and the 
Federal Sugar Refining Co. likewise filed motions to 
dismiss. The three motions to dismiss were argued 
together May 17, 1911, and submitted on briefs. 
May 22, 1911, the Commerce Court entered an order 
granting the motion for a temporary injunction. On 
the same day it entered a separate order overruling 
the motions to dismiss the petition, allowing twenty 
days within which to file answers. Important ques¬ 
tions of both law and fact are involved in the con¬ 
tention that Arbuckle Bros, are receiving preferences 
and discriminations at the hands of railroad com¬ 
panies as against other independent refiners and ship¬ 
pers of sugar. June 12, 1911, the Interstate Com¬ 
merce Commission and Federal Sugar Refining Co. 
took a joint appeal to the Supreme Court. June 16, 
1911, the United States followed with a separate 
appeal. January 9, 1912, the cause was argued in 
the Supreme Court. June 10, 1912, the Supreme 
Court announced its opinion, holding the preliminary 
injunction was issued in the discretion of the Com¬ 
merce Court and that in view of the importance of the 
case and the fact that the commission was divided, it 
would affirm the order of the Commerce Court and, 
without passing on the merits of the case, it remanded 
the case with instructions to proceed to a final hearing. 
June 9, 1911, the United States filed its answer in the 
Commerce Court, as did also Federal Sugar Refining 


CASES BROUGHT IX THE COMMERCE COURT. 


23 


Co. The United States, is ready to and will at once 
proceed with the taking of evidence for the final 
hearing early in the autumn. 

No. 39. Baltimore & Ohio Railroad Company et al. v. 

United States , commonly known as the “ Restricted 

coal rate case.” 

February 24, 1911, the Interstate Commerce Com¬ 
mission directed certain railroad companies to cease 
and desist from giving preferences in rates on inter¬ 
state shipments of coal for particular consignees, for 
particular uses, which rates were restricted to certain 
shippers and were not open to all shippers alike. 
Numerous railroad companies filed a petition before 
the Commerce Court, seeking to enjoin and annul the 
order of the commission and asked for a preliminary 
injunction. The motion was argued and submitted. 
May 29, 1911, the Commerce Court granted a pre¬ 
liminary injunction enjoining the order of the com¬ 
mission and issued its writ of injunction. An appeal 
was taken to the Supreme Court from the interlocutory 
order or decree of the Commerce Court and an answer 
was filed by the United States to the petition. Im¬ 
portant questions are involved in the contention that 
railroad companies have been making preferential 
and discriminatory rates among themselves applicable 
to coal consumed in the locomotives. January 9, 
1912, the case was argued in the Supreme Court. 
June 7, 1912, the Supreme Court reversed the order 
of the Commerce Court, holding that railroad com¬ 
panies as shippers and consumers of coal were on the 


24 CASES BROUGHT IN THE COMMERCE COURT. 

basis of all other shippers and consumers of coal, that 
the preliminary injunction was improvident, and 
directed a dismissal of the petition. 

No. 40. Norfolk & Western Railway Company et al v. 

United States. 

June 7, 1910, the Interstate Commerce Commission 
reduced the local class rates from Roanoke, Va., to 
Winston-Salem, N. C., and from Lynchburg, Va., to 
Durham, N. C. It also reduced certain other class 
rates from Cincinnati, Ohio, to the North Carolina 
destinations. On May 1, 1911, the carriers filed a 
petition before the Commerce Court, supported by 
affidavits, seeking to set aside that order, and moved 
for a preliminary injunction. The motion was argued 
and submitted. May 25, 1911, the motion for a pre¬ 
liminary injunction was denied. The evidence was 
taken, and on February 16, 1912, the cause came on 
for final hearing. The basis of the attack on the 
order of the commission was that the railroad com¬ 
panies were not given a full hearing before the com¬ 
mission; that their interests were not sufficiently con¬ 
sidered; that the rates as reduced were confiscatory; 
that the commission misapprehended the facts; and 
that the rates as reduced would conflict with the long- 
and-short-haul clause; also that heavy losses would 
result. April 9, 1912, the opinion of the Commerce 
Court was filed, holding that the various contentions 
turned purely on questions of fact which were fore¬ 
closed by the findings of the commission, and direct¬ 
ing a dismissal of the petition. No appeal was taken. 


CASES BROUGHT IN THE COMMERCE COURT. 25 

No. 41. Atchison , Topeka & Santa Fe Railway Com¬ 
pany et al. v. United States , commonly known as 
the “ pre-cooling and pre-icing citrus fruits case.” 
Prior to January 14, 1911, it had been the practice 
of the railroad companies to permit the shippers of 
citrus fruits in California to pre-cool and pre-ice the 
cars prior to shipment, with directions to the carriers 
not to re-ice in transit. The services of the carriers 
consisted only of setting the cars preliminarily to pre¬ 
cooling and loading and after the cars had been pre¬ 
cooled and loaded by the shipper to transport them 
to destination. For this privilege the carriers have 
levied a charge of $30 per car. On complaint to the 
commission, the latter found, January 14, 1911, that 
the charge of $30 was unreasonable and reduced it 
to $7.50 per car, which was sufficient to pay for the 
repairing of the bunkers. May 4, 1911, the carriers 
filed a bill, supported by affidavits, and moved for a 
preliminary injunction, on the ground that the com¬ 
mission had acted beyond its power; that the allow¬ 
ance of $7.50 per car did not pay for the cost of the 
service; that they were not obliged to permit pre¬ 
cooling and pre-icing; that their property would be 
confiscated and that they would sustain enormous 
losses. After argument, on May 29, 1911, the motion 
for a preliminary injunction was denied, the court 
holding that it did not construe the order of the com¬ 
mission as requiring the carriers to continue this 
privilege, but while the privilege was accorded the 
charge prescribed by the commission should be sus¬ 
tained. Thereupon the carriers filed new tariffs, to 


26 CASES BROUGHT IN THE COMMERCE COURT. 

become effective July 1, 1911, seeking to withdraw 
their tariffs permitting the pre-cooling and pre-icing. 
These new tariffs were suspended by the commission, 
and the case went to a second hearing before that 
body. April 8, 1912, the commission filed its report 
and entered its order finding that the shippers had 
the right to pre-cool and pre-ice their cars and ordered 
a permanent suspension of the proposed tariffs which 
sought to take away that right. 

May 15, 1912, the carriers filed a supplemental 
petition, further alleging that the commission was 
without power to suspend the tariffs and erred as a 
matter of law in so doing; that pre-cooling and pre¬ 
icing constitute a part of the refrigeration and that 
the carriers were entitled to provide and perform all 
refrigeration services and make reasonable charges 
therefor and that $7.50 was not sufficient to pay the 
cost. A second motion for a preliminary injunction 
was made before Judge Garland, which, May 17, 1912, 
was also denied; and the order of the commission is 
still in full force and effect. From the report of the 
commission it appears that by this order the shippers 
of California are saving $600,000 per annum. The 
case will not come to a final hearing before the 
autumn. 

No. 42. The Arkansas Fertilizer Company v. United 

States. 

The Interstate Commerce Commission had held, 
in Blinn Lumber Co. v. Southern Pacific Co. (18 
I. C. C. R., 430), that complaints for reparation should 
be filed with the commission within two years from 


CASES BROUGHT IN THE COMMERCE COURT. 


27 


the time the shipment is delivered to the consignee, 
when the freight charges become due and owing, 
and not within two years from the time the freight 
charges are actually paid. The complainant in this 
case transported certain freight and did not pay the 
full freight charges. Some months later, after the 
full freight charges were paid, complaint was filed 
with the commission alleging that the charges were 
unreasonable and claiming reparation. The com¬ 
plaint was filed more than two years after the ship¬ 
ment was delivered but less than two years after the 
freight charges had been paid. The claim for repara¬ 
tion was denied. May 22, 1911, a petition was filed 
before the Commerce Court setting forth the facts 
and alleging that the holding of the commission on 
the legal question was wrong. The commission 
intervened, adnitted the jurisdiction of the Com¬ 
merce Court, and fully answered the petition, ad¬ 
mitting all the facts and reciting in full the circum¬ 
stances under which the ruling of the commission 
was made. The United States challenged the juris¬ 
diction of the court on the ground that the action 
of the commission was not an order within the mean¬ 
ing of the act to regulate commerce creating the 
Commerce Court. It further contended that the 
commission rightly held on the law, and that the 
petition did not state a cause of action. October 5, 
1911, the cause was subnitted on printed briefs. 
December 5, 1911, the Commerce Court filed its 
opinion.. Presiding Judge Knapp, with whom Judge 
Mack concurred, held that the commission rightly 


28 


CASES BROUGHT IN THE COMMERCE COURT. 


decided on the law, and that the petition should be 
dismissed. Judge Archbald, concurring, agreed that 
the petition should be dismissed, not because the 
petition failed to state a cause of action, but for the 
reason that the action of the commission did not con¬ 
stitute an order within the meaning of the statute. 
Judge Carland, with whom Judge Hunt concurred, 
filed a dissenting opinion, holding that the action of 
the commission was an order within the meaning of 
the statute, that the order should be vacated, and 
the commission directed to hear the case on its 
merits. An order was entered dismissing the petition 
and no appeal was taken. 

No. 44. Southern Railway Company et al. v. United 

States. 

June 19, 1911, the Interstate Commerce Com¬ 
mission, in cases before it numbered 2804 and 2838, 
directed certain common carriers to pay unto the 
St. Louis Blast Furnace Company the sum of $490.81 
and the sum of $7,374.25, respectively, as reparation 
for unreasonable rates charged and collected for the 
transportation of coke in carloads from Deepwater, 
W. Va., to Carondelet, Mo. Other than to order the 
reparation paid, the commission took no action. 
August 14, 1911, the railroad companies filed a peti¬ 
tion before the Commerce Court seeking to set aside 
and annul the two orders and to enjoin the same 
during the pendency of the suit. September 14, 1911, 
the United States and the Interstate Commerce Com¬ 
mission filed a joint motion to dismiss the petition 
for want of jurisdiction in the Commerce Court over 


CASES BROUGHT IN THE COMMERCE COURT. 29 

the subject matter, the order being one for the pay¬ 
ment of money only, and the statute fully and speci¬ 
fically providing for the enforcement of, or the de¬ 
fense to, orders for reparation found by the Inter¬ 
state Commerce Commission. October 5, 1911, the 
case was argued and submitted on a brief of the 
United States. December 5, 1911, the Commerce 
Court filed its opinion holding that the orders of the 
commission awarding reparation were subject to re¬ 
view by the Commerce Court under the statute pro¬ 
viding jurisdiction in “ cases brought to enjoin, set 
aside, annul, or suspend, in whole or in part, any 
order of the Interstate Commerce Commission,” and 
that the motion to dismiss for want of jurisdiction 
should be overruled. January 24, 1912, the peti¬ 
tioners voluntarily dismissed the petition on a 
stipulation. 

No. 46. The Nashville Grain Exchange and Nashville 
Board of Trade v. United States. 

No. 47. Louisville & Nashville Railroad Company and 
Nashville , Chattanooga & St. Louis Railway v. 
United States. 

June 9, 1911, the Interstate Commerce Commis¬ 
sion entered an order against certain railroad com¬ 
panies directing them to cease and desist from grant¬ 
ing to dealers at Nashville the privilege of rebilling 
or reshipping grain, grain products, and hay from 
Nashville while denying the privilege to dealers at 
Atlanta and other Georgia points, holding the practice 
as it then existed was an undue and unreasonable 
prejudice and disadvantage in favor of Nashville and 


80 


CASES BROUGHT IN THE COMMERCE COURT. 


against Atlanta and other Georgia points. August 
24, 1911, the complainants in No. 46 filed a petition 
to annul and set aside the order and for a temporary 
injunction. The United States and the Interstate 
Commerce Commission filed a joint motion to dis¬ 
miss the petition on the ground that the court has no 
jurisdiction over the parties as original complainants 
in a separate proceeding. On August 24, 1911, the 
two railroad companies also filed a bill to annul and 
set aside the order of the commission and prayed for 
a temporary injunction. To that petition the United 
States and the Interstate Commerce Commission filed 
separate answers. October 18,-1911, the two cases 
were argued and submitted on printed briefs. Octo¬ 
ber 24, 1911, the Commerce Court announced its 
opinion and entered its order. It failed to pass on 
the motion to dismiss in No. 46, but ordered that 
the two cases be consolidated, and that the petition 
in No. 46 stand as an intervening petition in No. 47; 
also that a preliminary injunction issue suspending 
the order of the Interstate Commerce Commission 
until the final hearing. The reasons given by the 
court were that if the preliminary injunction were 
granted the losses to Atlanta and other Georgia 
points would be small as compared to the losses 
which the petitioners would sustain in the event the 
preliminary injunction was denied and it should 
develop on final hearing that the petitioners were 
entitled to the relief prayed; and that the court, under 
the circumstances, should invoke its “ discretion.” 


CASES BROUGHT IN THE COMMERCE COURT. 31 

Evidence was taken and the cause was finally 
heard April 11, 1912. June 7, 1912, the Commerce 
Court filed its opinion (Judge Hunt dissenting) 
annulling the order of the Interstate Commerce Com¬ 
mission, and holding that because it was claimed that 
the reshipping privilege was extended to shippers and 
dealers at Nashville on account of the competition 
on the Cumberland River, and under the facts as 
disclosed by the record, the question of discrimina¬ 
tion against Atlanta and other Georgia points under 
section 3 of the act to regulate commerce was one of 
law on which the commission had erroneously held 
and that a permanent injunction should issue. An 
appeal will promptly be taken. 

No. 49. Lehigh Valley Railroad Company v. United 

States, commonly known as the “Meeker coal rate 

case.” 

June 8, 1911, the Interstate Commerce Commission 
found that the rates for the transportation of anthra¬ 
cite coal in carloads from the Wyoming coal region 
in Pennsylvania to Perth Amboy, N. J., of $1.55 per 
gross ton on prepared sizes, $1.40 per gross ton on 
pea coal, and $1.20 per gross ton on buckwheat coal 
were unreasonable, and ordered the petitioner to 
apply rates not in excess of $1.40 and $1.30, and 
$1.15. September 29, 1911, petitioner filed its peti¬ 
tion to annul and set aside the order and prayed for 
a preliminary injunction, alleging in the Commerce 
Court that the reduced rates were confiscatory of its 
property. The petition and the exhibits with the 
affidavits were quite voluminous and set forth the 
value of the property as $250,000,000 as well as the 


32 CASES BROUGHT IN THE COMMERCE COURT. 

various fixed charges and expenditures, and that the 
loss the company would sustain unless an injunction 
was issued would approximate $500,000. October 9, 
1911, the United States filed a motion to dismiss the 
petition, and the case was argued on October 9, 10, 
and 11, and submitted on printed briefs. October 
12, 1911, the court entered an order denying the 
motion for a preliminary injunction. The reduced 
rates at once went into full force and effect. The 
cause was continued from time to time until April 
11, 1912, when the petitioner withdrew the petition 
and paid the costs. 

No. 50. Atchison , Topeka & Santa Fe Railway Com¬ 
pany and numerous other railroad companies v. 

. United States. 

No. 51. Union Pacific Railroad Company and nu¬ 
merous other railroad companies v. United States. 
These are commonly known as the “ Intermountain 
rate cases/'’ and involve the validity of section 4 of 
the act entitled “ An act to regulate commerce,” etc., 
as amended June 18, 1910, as well as the validity of 
certain orders of the Interstate Commerce Commis¬ 
sion in acting upon the applications of certain com¬ 
mon carriers for relief under that section. October 
4, 1911, petitions were filed charging that section 4 
is unconstitutional and void in that it delegates 
legislative power to the Interstate Commerce Com¬ 
mission, and, if valid, the orders of the Interstate 
Commerce Commission are beyond its power and 
confiscatory of the property of the companies in that 
they seek to fix rates to intermediate points on the 
basis of a certain percentage higher than the rates to 


CASES BROUGHT IN THE COMMERCE COURT. 


33 


the Pacific coast terminals. In each case the United 
States filed a motion to dismiss, and on October 20, 
23, 24, and 25 the cases were argued on the motions 
for preliminary injunctions and the motions to dis¬ 
miss, and were submitted to the court. November 
9, 1911, the court filed an opinion holding null and 
void the orders of the commission and entered an 
order granting a preliminary injunction, adjudging 
that the commission was without power to fix whole 
bodies of rates on a percentage basis without regard 
to specific rates on specific articles. November 21, 
1911, an appeal was taken from that order to the 
Supreme Court and the cases were argued and taken 
under advisement in February, 1912. Subsequently 
the Supreme Court restored the cases to the docket 
and assigned them for reargument in October, 1912. 

No. 52. Denver and Rio Grande Railroad Company 
and numerous other railroad companies v. United 
States, commonly known as the “Salt Lake rate 
case.” 

June 22, 1910, the Interstate Commerce Com¬ 
mission in case No. 2662 entered an order finding 
that the class rates between Chicago, Mississippi 
River, and Missouri River rate territory on the one 
hand and Salt Lake City, Provo, and Ogden, Utah, 
on the other hand, in both directions, were unjust 
and unreasonable and that the rates now applied to 
certain commodities in said rate territories to said 
points of destination in Utah were unjust and 
unreasonable, and directed and prescribed certain 
just and reasonable rates in the place and stead 

48250—S. Doc. 789, 62-2-3 


34 CASES BROUGHT IN THE COMMERCE COURT. 

thereof, and directed the carriers to prepare their 
tariffs accordingly. October 4, 1911, a petition was 
filed to annul and suspend the order of the Interstate 
Commerce Commission, and prayed for a temporary 
injunction, alleging that the reduced rates were con¬ 
fiscatory of the properties of the companies, and 
particularly the Denver and Rio Grande Railroad 
Co., and that the commission acted beyond its power 
in using the Pacific coast terminal rates as a basis 
upon which to fix the Salt Lake City rates. On 
October 26, 1911, the United States filed a motion to 
dismiss. This case is a companion to cases 50 and 
51, and was argued on October 25 and 26, imme¬ 
diately after the submission of those cases. At the 
conclusion of the arguments the court denied the 
motion for a preliminary injunction. The hearing 
of the case has since been continued pending the 
decision of the Supreme Court in Nos. 50 and 51. 

No. 53. The United States of America, on the relation of 
Joseph W. Aorcross and Roy M. Wolvin, partners 
doing business as the Flour City Line; and Pillsbury 
Flour Mills Company , a Minnesota corporation; 
Northwestern Consolidated Milling Company , a 
New Jersey corporation; and Russell-Miller Milling 
Company, a North Dakota corporation, v. Lehigh 
Valley Railroad Company, a Pennsylvania corpo¬ 
ration, commonly known as “ The Flour City Line 
case.” 

In this case certain flouring and milling interests in 
the Northwest organized a corporation for the pur¬ 
pose of conducting a transportation service on the 


CASES BROUGHT IN THE COMMERCE COURT. 35 

Great Lakes, independently of any of the larger com¬ 
panies already operating who, it was represented, 
were allied with the railroad companies. With the 
water-line companies doing business on the Lakes, the 
railroad companies, it was alleged, had common ar¬ 
rangements and through routes and joint rates from, 
say, St. Paul to New York, via rail to Duluth, water 
to Buffalo, rail to New York. The respondent in the 
above-entitled cause refused to make such common 
arrangement and through routes and joint rates with 
the Flour City Line, and the latter, on October 20, 
1911, filed before the Commerce Court a petition for a 
writ of mandamus seeking to compel the respondent 
to receive and move the traffic from Buffalo to New 
York, and to furnish cars and other facilities for that 
purpose at the same proportion of rates as it received 
and moved similar traffic for other water transpor¬ 
tation companies. October 25, 1911, the court heard 
brief arguments of the respective counsel, and 
promptly denied the relief prayed in the petition on 
the ground that the court was without jurisdiction to 
entertain the same. The case was then dismissed by 
the petitioners. The United States was not a party 
to the suit and took no part in the proceedings. 

No. 54. Anaconda Copper Mining Company et al. v. 

United States of America. 

December 12, 1910, the Interstate Commerce 
Commission dismissed certain complaints of the 
mining company and other claimants against Chi¬ 
cago & Erie Railroad Co. and numerous other rail¬ 
road companies, in which complaints reparation was 


36 CASES BROUGHT IN THE COMMERCE COURT. 

claimed on unreasonable rates charged and col¬ 
lected for the transportation of coal from West Vir¬ 
ginia and Pennsylvania to South Chicago, Ill. Oc¬ 
tober 23, 1911, the petitioners filed their petition in 
the Commerce Court, alleging that the orders of the 
Interstate Commerce Commission in denying the 
reparation and dismissing the complaints were erro¬ 
neous in that at the time the complaints were made 
the defendants had in effect tariff schedules prescrib¬ 
ing two separate rates on coke between the points 
named, one of $2.65, applying on foundry and other 
furnace coke, and the other of $2.35, applying only 
on coke for use in blast furnaces for smelting the 
iron from the ores, and that the basis for the differ¬ 
ence in the two rates rested on the uses to be made 
of the coke. 

The United States filed a motion to dismiss for 
want of jurisdiction, on the ground that an unsuc¬ 
cessful complainant before the commission was with¬ 
out standing to maintain an action before the Com¬ 
merce Court. The court overruled the motion to 
dismiss and entered upon a hearing. June 7, 1912, 
an opinion was filed sustaining the action of the 
commission on the merits. 

No. 55. Crane Iron Works v. United States of America. 

November 11, 1911, the petitioner filed a petition 
seeking to set aside an order of the Interstate Com¬ 
merce Commission entered February 8, 1910, dis¬ 
missing a complaint of the Crane Railroad Co. which 
sought to compel certain trunk lines to establish 
through routes and joint rates with the Crane Rail- 


CASES BROUGHT IN THE COMMERCE COURT. 37 

road Co. to and from the plant of the Crane Iron 
Works and the plants of five other industries. The 
commission dismissed the complaint on the ground 
that the Crane Railroad Co. was a mere plant facility 
of the Crane Iron Works and not a common carrier 
within the meaning of the act to regulate commerce. 
The United States filed a motion to dismiss for want 
of jurisdiction on the ground that an unsuccessful 
complainant before the commission was without 
standing to maintain an action before the Commerce 
Court. The court overruled the motion to dismiss 
and entered upon a hearing. June 7, 1912, an 
opinion was filed, sustaining the action of the com¬ 
mission on the merits. 

No. 56. The Kansas City Southern Railway Company 

v. United States. 

November 17, 1911, the railway company filed a 
petition before the Commerce Court seeking to have 
declared unreasonable certain parts of certain orders 
entered by the commission prescribing the forms of 
the reports and accounts to be submitted to the 
commission by the railway company under section 
20 of the act to regulate commerce and requiring the 
railway company to submit such reports and ac¬ 
counts. It is alleged that the reports and accounts, 
as prescribed by the commission, do not permit a 
proper showing on the part of the railway company 
of its assets, and by reason thereof it will be hindered 
in the sale of its bonds. Issues have been joined and 
part of the evidence has been taken. No motion for 


38 CASES BROUGHT IN THE COMMERCE COURT. 

injunction has been made and the case may not be 
finally heard until the autumn. 

No. 57. United States of America, ex rel. Stony Fork 
Coal Company, Ralston Coal Company, Monarch 
Coal and Coke Company, and Lignite Coal Mining 
Company v. Louisville and Nashville Railroad Com¬ 
pany et al. 

November 25, 1911, the coal companies named filed 
a petition for a writ of mandamus against the railroad 
company named and the Southern Railway Co. for 
the purpose of requiring them to furnish and transport 
the coals of the mining companies over the line of rail¬ 
road jointly operated by the two railroad companies 
at Middlesboro, Ky., and over which the two com¬ 
panies had through routes and joint rates to south¬ 
eastern territory. From the petition it appears that 
even though both railroad companies had rated the 
mines and had access thereto, neither would furnish 
cars for the transportation of the coal. December 5, 
1911, the United States intervened in support of the 
contention of the shippers. Issues were joined by the 
two respondents filing separate answers and motions 
to dismiss. February 15, 1912, the cause was heard. 
March 4, 1912, the court issued a peremptory writ 
of mandamus directing them to furnish cars and to 
transport the coals. March 20, 1912, the court filed 
its opinion. No appeal was taken and the mandamus 
has become absolute. 


CASES BROUGHT IN THE COMMERCE COURT. 39 

No. 58. Florida East Coast Railway Company v. 

United States. 

• November 6, 1911, the Interstate Commerce Com¬ 
mission, on complaints duly filed before it, upon 
which issues were j oined and hearings were had, reduced 
the rate on citrous fruits, vegetables, and pineapples 
from southern Florida to the North. The amount 
of the reduction in the revenues of the petitioner 
would approximate $100,000. December 26, 1911, 
the petition was filed, supported by affidavits, and an 
application was made to Judge Carland for a prelimi¬ 
nary injunction. A hearing was had after notice 
was served, and Judge Carland stayed the order of 
the commission. Answers were filed to the petition 
together with certain counter affidavits. February 
9, 1912, the case came before Commerce Court on a 
motion to dissolve the preliminary injunction. After 
a hearing that motion was overruled and the injunc¬ 
tion continued in force. Evidence was taken before 
the Commerce Court, and the cause is assigned for 
final hearing on June 25, 1912. 

The basis of the attack on the order of the com¬ 
mission is that the rate prescribed by the commission 
is unreasonably low and confiscatory of the property 
of the company. It is further claimed that the com¬ 
mission erred in not considering the full cost of the 
construction of the “over-sea” extension to Key 
West, amounting, approximately, to $180,000 per 
mile for 122 miles. The main defense is that all 
questions raised are foreclosed by findings of fact. 


40 


CASES BROUGHT IN THE COMMERCE COURT. 


No. 59. Southern Pacific Company et at. v. United 

States, commonly known as the “ Willamette Val¬ 
ley lumber rate case.” 

June 1, 1908, the Interstate Commerce Commission 
reduced the rate on rough green fir lumber and lath 
in carload lots from $5 per ton of 2,000 pounds from 
points upon the east bank of the Willamette River, 
Oregon, and other points to San Francisco and bay 
points to $3.40 per ton, and from points on the west 
bank of said river south of Corvallis to San Fran¬ 
cisco and bay points to $3.65 per ton. July 24, 1908, 
the petitioners filed their bill in the Circuit Court for 
the Northern District of California to enjoin and 
vacate said order. February 28, 1910, the circuit 
court entered its final decree dismissing the bill and 
the cause was appealed to the Supreme Court. Feb¬ 
ruary 20, 1911, the Supreme Court entered its 
decree, reversing the decree of the circuit court and 
holding that the order of the commission was not 
based upon the reasonableness of the rate for the 
service rendered by the carrier but was based upon 
an attempted exercise of power hy the commission 
to protect the lumber industry of the Willamette 
Valley from the effect on their business of the higher 
rate. 

September 13, 1910, complaints were again filed 
against a proposed advance in the rates to $5 per 
ton, the tariff having been issued, which was sus¬ 
pended for a hearing on the complaint. February 
4, 1911, the commission took further evidence. 
June 22, 1911, the commission entered its second 


CASES BROUGHT IN THE COMMERCE COURT. 41 

order reducing certain of the rates to $3.50 per ton 
and certain of the rates to $3.75 per ton. January 
16, 1912, a petition was filed in the Commerce Court 
attacking the second order ©f the commission on the 
ground that the commission, while it pretended to 
rehear the case on the issue as to the reasonableness 
of the rate, in fact it had not done so, but, in an 
attempt to thwart the opinion and judgment of the 
Supreme Court, it had merely entered the same order 
it had previously entered, and in fact based it on 
identically the same illegal grounds, though it osten¬ 
sibly had placed it on other and legal grounds. 
No motion for a preliminary injunction was made. 
Answers were filed and evidence was introduced. 
April 17, 1912, the cause was argued and submitted 
on final hearing. June 7, 1912, the Commerce Court 
filed its opinion holding that the rate fixed by the 
commission was not fixed arbitrarily or without 
considerations which justified it; and above all, not 
for the purpose of enforcing a policy inaugurated by 
the carrier, which it was held could not equitably be 
abandoned; but in the exercises of due judgment, 
after full consideration of the entire subject, as 
shown by the reasons given for it. The court directs 
the dismissal of the petition. 

No. 60. The Baltimore & Ohio Southwestern Railroad 

Company and the Norfolk & Western Railway Com¬ 
pany v. United States. 

December 13, 1911, the Interstate Commerce Com¬ 
mission, after a complaint duly filed and a full hearing 
thereon, entered an order directing the two petition- 


42 CASES BROUGHT IN THE COMMERCE COURT. 

ers to construct and maintain for a period of two 
years from February 15, 1912, switch connections 
with, and according as their various lines may run, 
to establish and put in force, for a period of two years 
from said date, through routes to and from inter¬ 
state points to and from all points on the line of the 
Cincinnati & Columbus Traction Company, between 
and including Boston and Dodsonville, in the State 
of Ohio, finding that said traction company was a lat¬ 
eral branch line of railroad within the meaning of the 
act to regulate commerce. 

January 22, 1912, a petition was field in the Com¬ 
merce Court seeking to annul and enjoin that order, 
and notice of a motion for a preliminary injunction 
was served. February 6, 1912, the United States 
filed a motion to dismiss the petition. February 7, 
1912, a hearing was had. February 14, 1912, a pre¬ 
liminary injunction was granted. All parties elected 
to stand on the motion to dismiss. April 9, 1912, the 
opinion of the Commerce Court was filed, holding that 
the line of railroad of the Cincinnati & Columbus 
Traction Company was not a lateral branch line of 
railroad within the meaning of the statute and that 
the commission was without power to order the 
switch connection or to establish the through routes 
and joint rates. The order of the commission was 
annulled and a permanent injunction was issued. 
April 19, 1912, the final decree was entered. 

April 23, 1912, the United States and the other 
respondents appealed. A motion to advance was 
made and granted and the cause assigned for argu¬ 
ment in October, 1912. 


CASES BROUGHT IN THE COMMERCE COURT. 43 

No. 61. Atchison , Topeka & Santa Fe Railway Com¬ 
pany and jive hundred and thirty-one (531) other 
railroad and transportation companies and the re¬ 
ceivers of certain thereof v. United States. 

October 5, 1911, the Commerce Court held null and 
void the order of the commission reducing the rate 
on lemons from $1.15 per hundred pounds to $1 per 
hundred pounds, on the ground that by the order the 
commission had sought to protect the lemon growers 
of southern California against the competition of the 
lemon growers of Sicily. 

December 11, 1911, the Interstate Commerce Com¬ 
mission entered a second order reducing the rate on 
lemons from southern California from $1.15 per hun¬ 
dred pounds to $1 per hundred pounds, expressly 
basing the order on the question of the reasonable¬ 
ness of the rate for the service rendered. February 
2, 1912, a petition for an injunction was filed and 
notice was served. It was alleged that the order of 
the commission was made and entered so arbitrarily 
and unjustly as to fix the rate of $1 on lemons con¬ 
trary to the evidence and in reality without relevant 
and sufficient evidence to support it, and that the 
rate prescribed by the commission was inadequate 
for the service rendered and confiscatory. February 
8, 1912, the hearing was held on the motion for a 
preliminary injunction. February 10, 1912, an order 
was entered denying the motion for a preliminary 
injunction, and the order of the commission became 
effective. Evidence has been taken, and the cause is 
now set for final hearing June 24, 1912. The peti- 


44 CASES BROUGHT IN THE COMMERCE COURT. 

tioners claim that if the order of the commission 
remains in force and effect for two years it will result 
in a loss to them of $450,000. 

No. 62. O’Gara Coal Company et al. v. United States. 

February 5, 1912, the Interstate Commerce Com¬ 
mission, after a complaint duly filed and a hearing 
thereon, filed its report and entered its order dismiss¬ 
ing the complaint against the carriers who sought to 
increase the rate on coal transported from the Harris¬ 
burg field in Illinois to Chicago and Milwaukee. It 
found that the advance did not subject the Harris¬ 
burg field, Milwaukee, or the traffic in question to 
any undue or unreasonable preference or disad¬ 
vantage. 

February 24, 1912, the unsuccessful complainants 
filed their petition before the Commerce Court seeking 
to annul the action of the commission and to enjoin 
the same. February 28, 1912, a motion for a pre¬ 
liminary injunction was heard. March 5, 1912, the 
motion was denied. No further action has been 
taken. A motion to dismiss for want of jurisdiction 
will be made and presented June 24, 1912. 

No. 63. The Cattle Raisers 1 Association of Texas et al. 

v. United States. 

March 7, 1912, a petition was filed praying that the 
Commerce Court set aside an order of the Interstate 
Commerce Commission denying reparation to peti¬ 
tioners on certain numerous shipments of cattle from 
Texas and other southeastern points. No action has 
been taken and no order has been entered by the 


CASES BROUGHT IN THE COMMERCE COURT. 45 

Commerce Court. As this case is identical in form 
to the Procter and Gamble case (No. 9) and will be 
dismissed on motion for want of jurisdiction, no de¬ 
tailed statement seems necessary. 

No. 64. George H. Davis et til. v. United States. 

February 5, 1912, the Interstate Commerce Com¬ 
mission filed a report and entered an order prohibit¬ 
ing railroad companies from allowing grain elevators 
on the Missouri River more than three-fourths of a 
cent per bushel for the elevation and transfer of 
grain. March 15, 1912, the petitioners, representing 
certain boards of trade at cities on the Missouri 
River, filed them petition in the Commerce Court 
seeking to annul the order of the commission. Issues 
were joined. Subsequently the commission, on its 
own motion, set aside the order and no further action 
has been taken before the court. 

No. 65. Chamber of Commerce of Augusta , Ga., v. 

United States. 

April 11, 1912, petition was filed seeking the annul¬ 
ment of the action of the Interstate Commerce Com¬ 
mission in dismissing a complaint alleging that the 
rate of $2.10 per ton on coal from Coal Creek mines 
in Tennessee to Augusta, Ga., in force since October 
1, 1907, was unjust and unreasonable in itself and 
subjected the manufacturers of Georgia to undue 
prejudice as compared with other designated points 
in the same general territory. In dismissing the 
complaint the commission denied reparation. June 
4, 1912, the case was heard by the Commerce Court 


46 CASES BROUGHT IN THE COMMERCE COURT. 

on motions to dismiss. June 7, 1912, the cause was 
dismissed, the court holding that none of the objec¬ 
tions made to the report and order of the commission 
was tenable. 

No. 66. International Salt Company of Illinois et al. v. 

United States. 

April 26, 1912, a petition was filed in the Commerce 
Court alleging certain errors and irregularities on the 
part of the commission in dismissing the complaint 
of the petitioners against certain railroad companies 
and denying reparation, while at the same time allow¬ 
ing reparation in another case, the facts of which 
were alleged to be similar to that of the petitioners. 
Inasmuch as the petition is filed by complainants who 
were unsuccessful before the Interstate Commerce 
Commission, the case falls squarely within the ruling 
of the Supreme Court in the Procter and Gamble and 
the Hooker and Eagle White Lead cases, and the Com¬ 
merce Court is without jurisdiction. June 7, 1912, 
the case was heard by the Commerce Court on motions 
to dismiss, and submitted. 

No. 67. Houston, East & West Texas Railway Com¬ 
pany et al. v. United States. 

No. 68. The Texas & Pacific Raihcay Company v. 

United States. 

March 11, 1912, the Interstate Commerce Com¬ 
mission found that the rates from Shreveport, La., 
to points in eastern Texas are higher than are main¬ 
tained from Dallas, Houston, and other cities within 
Texas to such points, under substantially similar 
circumstances and conditions. The complaint had 


CASES BROUGHT IN THE COMMERCE COURT. 


47 


attacked the rates from Shreveport as unreasonable 
and as discriminatory when compared with Texas 
intrastate rates of the same carriers. The com¬ 
mission found that the class rates out of Shreveport 
to certain points in Texas were unreasonable, and 
prescribed reasonable rates for the future, and that 
the present relation of rates gives an undue prefer¬ 
ence to the Texas cities in question and effects an 
unlawful discrimination against Shreveport, and 
ordered the carriers to cease and desist from charging 
higher rates upon any commodity from Shreveport 
to Dallas or Houston, or points intermediate thereto, 
than are contemporaneously charged by them for the 
carriage of such commodity to equidistant points 
from Houston or Dallas toward Shreveport. It was 
contended by the carriers that the rates between the 
points within the State of Texas had been fixed by 
the railroad commission of that State, were unreason¬ 
ably low r , and that the rates so fixed were not a 
proper basis for the fixing of similar interstate rates. 
The commission held, however, that if a State, by the 
exercise of its lawful power, establishes rates which 
the interstate carrier makes effective upon State 
traffic, that carrier does so with the full knowledge 
that the Federal Government requires it to apply 
such rates under like conditions upon interstate 
traffic. The commission directed the carriers to put 
in force and effect the same rates between Shreveport 
and the Texas points that were in force and effect 
between the points wholly within the State of Texas. 

May 10, 1912, petitions were filed in the Commerce 
Court seeking to annul and enjoin the orders of the 


48 CASES BROUGHT IN THE COMMERCE COURT. 

commission. No motion for a preliminary injunction 
has been made, and the petitioners have since with¬ 
drawn their objections to the class rates prescribed 
by the commission. The order of the commission 
becomes effective July 1, 1912, and unless it is further 
postponed by the commission, a motion for a prelim¬ 
inary injunction will probably be made and acted 
upon. 

No. 69. Mack Manufacturing Company v. United 

States. 

November 26, 1909, the Interstate Commerce Com¬ 
mission, on the complaint of the manufacturing 
company and certain other brick companies, reduced 
the rate for the transportation of fire brick, building 
brick, and paving brick, in carloads, on shipments 
eastbound from Central Freight Association territory 
to trunk-line territory. January 31, 1911, these 
shippers filed complaints for reparation alleged to be 
due on shipments which moved prior to the time the 
commission reduced the rate. The rate had been 
22J cents during the period January 20, 1908, to 
February 2, 1910, and on the latter date the com¬ 
mission reduced it to 21 cents per 100 pounds from 
Chicago to New York. The commission declined to 
award the reparation and dismissed the complaint. 
May 13, 1912, the complainants before the com¬ 
mission, feeling themselves aggrieved by the action 
of the commission in refusing to award the repara¬ 
tion, filed their petition in the Commerce Court. 
June 8, 1912, the Interstate Commerce Commission 
represented that it had voluntarily set aside its order 
dismissing the complaint and would rehear the case. 


CASES BROUGHT IN THE COMMERCE COURT. 


49 


By agreement of the parties the cause in the Com¬ 
merce Court was dismissed without prejudice. 

No. 11. New York, Ontario and Western Railroad 
Company v. Interstate Commerce Commission. 

No. 12. Central Railroad Company of New Jersey v. 

Interstate Commerce Commission. 

No. 13. Delaware, Lackawanna and Western Railway 
Company v. Interstate Commerce Commission. 

No. 14. New York Central and Hudson River Railroad 
Company v. Interstate Commerce Commission. 

No. 29. Pennsylvania Railroad Company v. Inter¬ 
state Commerce Commission. 

No. 30. Lehigh Valley Railroad Company v. Inter¬ 
state Commerce Commission. 

No. 37. Philadelphia and Reading Railroad Company 
v. Interstate Commerce Commission. 

No. 43. Boston and Maine Railroad v. Interstate Com¬ 
merce Commission. 

No. 45. The New York, New Haven and Harford 
Railroad Company v. Interstate Commerce Commis¬ 
sion. 

No. 48. Erie Railroad Company v. Interstate Com¬ 
merce Commission. 

These cases were all transferred to the Commerce 
Court from various circuit courts of the Eastern States. 
March 4, 1907, the commission prescribed the method 
and form of monthly reports of hours of service of 
employees of railroads. August 21, 1908, the Balti¬ 
more & Ohio Railroad Co. filed a bill in the Circuit 
Court for the District of-Maryland attacking the order 
of the commission. The commission filed a demurrer, 

48250—S. Doc. 789, 62-2-4 


50 


CASES BROUGHT IN THE COMMERCE COURT. 


which the circuit court sustained, and the bill was dis¬ 
missed. On appeal to the Supreme Court the judg¬ 
ment was affirmed. A stipulation was signed by the 
counsel to the effect that the foregoing cases would 
abide by the final judgment in the Baltimore & Ohio 
case. The Baltimore & Ohio case was decided by 
the Supreme Court adversely to the complainants. 
October 2, 1911, the Commerce Court dismissed all the 
foregoing cases at the cost of the petitioners on 
stipulations signed by the parties. 

No. 8 . Interstate Commerce Commission , petitioner , v. 

Nashville , Chattanooga and St. Louis Railway. 

No. 10. Delaware , Lackawanna and Western Railway 
Company v. Interstate Commerce Commission. 

No. 16. Chicago , Milwaukee and St. Paid Railway 
Company v. Interstate Commerce Commission. 

No. 17. Chicago , Milwaukee and St. Paul Railway 
Company v. Interstate Commerce Commission. 

No. 26. United States et al. v. Long Island Railway 
Company. 

No. 27. The New York Central and Hudson River 
Railroad Company et al. v. Interstate Commerce 
Commission. 

No. 28. Delaware, Lackawanna and Western Railroad 
Company v. Interstate Commerce Commission and, 
Rahway Valley Railroad Company. 

These cases were transferred to the Commerce 
Court for the purpose of final disposition and were 
closed on stipulations and orders of the court thereon. 
As no action was taken by the Commerce Court other 
than to enter the orders dismissing the cases, no fur¬ 
ther statement is given. 


LIST OF CASES APPEALED FROM THE UNITED STATES 
COMMERCE COURT TO THE UNITED STATES SUPREME 
COURT—JUNE 11, 1912. 

No. 719. Interstate Commerce Commission and United 
States, appellants, v. Baltimore & Ohio Railroad 
Company (being No. 39 in the Commerce Court). 
February 24, 1911. Order of the Interstate Com¬ 
merce Commission entered. 

April 27, 1911. Petition filed in the Commerce 
Court. 

May 29, 1911. Preliminary injunction issued. 

June 6, 1911. Interstate Commerce Commission 
appealed. 

June 16, 1911. United States appealed. 

January 9, 1912. Appeals argued in the Supreme 
Court. 

June 7, 1912. The Supreme Court reversed the 
order of the Commerce Court issuing the preliminary 
injunction and directed a dismissal of the petition. 

No. 722. United States and Interstate Commerce Com¬ 
mission, appellants, v. Baltimore & Ohio Railroad 
Company et al. (being No. 38 in the Commerce 
Court). 

December 5, 1910. Order of the commission en¬ 
tered . 

April 13, 1911. Petition filed in the Commerce 
Court. 


51 


52 


CASES BROUGHT IN THE COMMERCE COURT. 


May 17, 1911. Hearing on motion for preliminary 
injunction. 

May 22, 1911. Preliminary injunction issued. 

June 12, 1911. Interstate Commerce Commission 
and Federal Sugar Refining Company appealed to the 
Supreme Court. 

June 16, 1911. United States appealed. 

January 9, 1912. Appeals argued. 

June 10, 1912. Order granting preliminary injunc¬ 
tion affirmed by the Supreme Court. 

(No. 5 and 6, respectively, in the Commerce Court.) 
No. 773. James J. Hooker et. al ., appellants, v. Martin 

A. Knapp et al . 

No. 774. The Eagle White Lead Company et al., ap¬ 
pellants, v. Interstate Commerce Commission et al. 

February 15, 1911. Cases transferred to Commerce 
Court. 

May 2, 1911. The United States filed a motion to 
dismiss for want of jurisdiction. 

July 20, 1911. The Commerce Court filed its opinion 
overruling the motion to dismiss for want of juris¬ 
diction and directing the dismissal of the bill on the 
merits and the petitioners appealed to the Supreme 
Court. 

January 8, 1912. Appeals argued in the Supreme 
Court. 

June 7, 1912. The Supreme Court reversed the 
order of thejCommerce Court dismissing the bills on 
the merits and directed a dismissal of the bills for 
want of jurisdiction in the court to entertain the 


same. 


CASES BROUGHT IN THE COMMERCE COURT. 


53 


(No. 9 in the Commerce Court.) 

No. 780. The Procter & Gamble Company, appellants, 
v. United States. 

December 14, 1910. Order of the commission dis¬ 
missing complaint of Procter & Gamble Co. 

February 22, 1911. Procter & Gamble Co. filed a 
petition in the Commerce Court to set aside order of 
dismissal. 

April 13, 1911. Argument was had -on the motion 
of the United States to dismiss the petition for want 
of jurisdiction, which was overruled 

May 11, 1911. The case was argued on its merits 
and submitted on briefs. 

July 20, 1911. An opinion was filed and an order 
entered dismissing the petition on its merits. 

August 10, 1911. The petitioner appealed to the 
Supreme Court. 

January 8, 1912. The appeal was argued. 

June 7, 1912. The Supreme Court reversed the 
order of the Commerce Court and directed a dis¬ 
missal of the petition for want of jurisdiction. 

No. 786. Interstate Commerce Commission and United 
States, intervenor, appellants, v. Southern Pacific 
Company et. al. (commonly known as the “San 
Francisco switching case,” and being No. 1 in 
the Commerce Court). 

July 20, 1911. Commerce Court issued a temporary 
injunction against the order of the Interstate Com¬ 
merce Commission. 


54 


CAS-ES BROUGHT IN THE COMMERCE COURT. 


August 18, 1911. An appeal was taken to the 
Supreme Court from this order. 

September 22, 1911. The cause was docketed in 
the Supreme Court. 

No further action has been taken. 

No. 787. Interstate Commerce Commission and United 
States, intervenor, appellants, v. Atchison, Topeka & 
Santa Fe Railway Co. et at (commonly known as 
the “Los Angeles switching case,” and being No. 2 
in the Commerce Court). 

July 20, 1911. The Commerce Court issued a 
temporary injunction against the order of the Inter¬ 
state Commerce Commission. 

August 18, 1911. An appeal was taken from that 
order to the Supreme Court. 

September 22, 1911. The appeal was docketed in the 
Supreme Court. 

No further action has been taken. 

(No. 25 in the Commerce Court.) 

No. 846. Omaha & Council Bluffs Street Railway 
Company, appellant, v. Interstate Commerce Com¬ 
mission. 

March 6, 1911. Cause transferred to the Commerce 
Court. 

May 2, 1911. Hearing in the Commerce Court. 
October 13, 1911. Commerce Court filed its opinion 
directing a dismissal of the petition and entered its 
order accordingly. 


CASES BROUGHT IN THE COMMERCE COURT. 55 

October 23, 1911. The petitioner appealed to the 
Supreme Court and the cause was argued January, 
1912. 

No opinion filed. 

(Nos. 21, 22, 23, and 24, respectively, in the Com¬ 
merce Court.) 

No. 879. Interstate Commerce Commission and The 
United States, appellants, v. Goodrich Transit 

Company. 

No. 880. Interstate Commerce Commission and The 
United States, appellants, v. Goodrich Transit 

Company. 

No. 881. The United States and Interstate Commerce 
Commission, appellants, v. White Star Line. 

No. 882. The United States and Interstate Commerce 
Commission, appellants, v. White Star Line. 

March 6, 1911. Cases transferred to the Commerce 
Court from the Northern District of Illinois. 

April 4, 1911. Arguments were made on motions 
to dismiss. 

October 5, 1911. The Commerce Court filed its 
opinion annulling the orders of the commission. 

November 11, 1911. Appellants appealed to the 
Supreme Court, and the causes were advanced and 
argued, February, 1912. 

April 1, 1912. Supreme Court reversed the judg¬ 
ments of the Commerce Court and directed a dis¬ 
missal of the petitions. 


56 CASES BROUGHT IN THE COMMERCE COURT. 

Nos. 883-928. United States v. Atchison , Topeka & 
Santa Fe Railway Company and numerous other 
railroad companies (being No. 50 in the Commerce 
Court). 

Nos. 884-929. United States v. Union Pacific Rail¬ 
road Company and numerous other railroad com¬ 
panies (being No. 51 in the Commerce Court). 

June 22, 1911, July 31, 1911. Orders of the com¬ 
mission entered. 

October 4, 1911. Petitions filed. 

November 9, 1911. Preliminary injunctions issued. 
November 21, 1911. Appeals perfected. 

February 19, 1912. Appeals argued. 

Later restored to the docket for reargument and 
reassigned for hearing in October, 1912. 

(No. 31 in the Commerce Court.) 

No. 994. Pennsylvania Railroad Company , appellant , 
v. Interstate Commerce Commission and The United, 
States. 

March 8, 1911. Cause transferred to the Commerce 
Court. 

April 3, 1911. The United States intervened. 
October 11, 1911. The cause was argued and 
submitted. 

December 5, 1911. The Commerce Court filed its 
opinion dismissing the petition. 

February 10, 1912. The petitioner appealed to the 
Supreme Court. 

No further action has been taken. 


CASES BROUGHT IN THE COMMERCE COURT.. 57 

(No. 60 in the Commerce Court.) 

No. 1133. The United States and Interstate Commerce 
Commission , appellants , v. Baltimore & Ohio South¬ 
western Railroad Co. et al. 

December 13, 1911. Order of the commission 
entered. 

January 22, 1912. Petition filed in the Commerce 
Court. 

February 6, 1912. United States filed a motion to 
dismiss. 

February 7, 1912. Hearing. 

February 14, 1912. Preliminary injunction issued. 
April 9, 1912. Opinion of the Commerce Court 
filed annulling the order of the commission All 
parties elected to stand on the motion to dismiss 
April 19, 1912. Final decree entered. 

April 23, 1912. Appeal to the Supreme Court 
Cause advanced for hearing October, 1912. 

No. 1063. Interstate Commerce Commission and the 
United States, intervenor, appellants, v. Louisville 
& Nashville Railroad Company (being No. 4 in the 
Commerce Court). 

February 28, 1912. The Commerce Court filed its 
opinion holding the order of the Interstate Commerce 
Commission null and void for lack of sufficient evi¬ 
dence before the commission to sustain it. 

March 7, 1912. The final decree was entered annul¬ 
ling the order of the commission and permanently 
enjoining the same. 


58 CASES BROUGHT IN THE COMMERCE COURT. 

March 16, 1912. The cause was appealed to the 
Supreme Court. 

The Supreme Court has advanced the cause for 
hearing in October, 1912. 

(No. 15 in the Commerce Court.) 

No. 1097. United States v. Union Stock Yard & 

Transit Company. 

March 4, 1911. The case was transferred to the 
Commerce Court from the Circuit Court for the 
Northern District of Illinois. 

May 19, 1911. The cause was argued and sub¬ 
mitted in the Commerce Court. 

November 14, 1911. The Commerce Court filed its 
opinion and entered its opinion. An application for 
rehearing was allowed and the cause reargued. 

March 9, 1912. Final decree entered and both sides 
appealed to the Supreme Court. 

The cause has been advanced for argument in 
October, 1912. 


LIST OF CASES PENDING IN THE UNITED STATES 
COMMERCE COURT, JUNE 11, 1912. 

Nos. 1-2. Southern Pacific Co. et al. and Atchison , 
Topeka & Santa Fe Ry. Co. et al. v. Interstate 
Commerce Commission. 

Nos. 18-19. Russe & Burgess et al. v. Interstate Com¬ 
merce Commission et al.; J. W. Thompson Lumber 
Co. et al. v. Interstate Commerce Commission et al. 
No. 38. Baltimore & Ohio Railroad Company et al. v. 
United States. 

No. 41. Atchison ; Topeka & Santa Fe Ry. Co. et al. 
v. United States. 

No. 52. Denver & Rio Grande R. R. Co. et al. v. 
United States. 

No. 56. Kansas City Southern Ry. Co. v. United 
States. 

No. 58. Florida East Coast Ry. Co. v. United States. 
No. 61. Atchison , Topeka & Santa Fe Ry. Co. et al. 
v. United States. 

No. 62. O’Gara Coal Co. et al. v. United States et al. 
No. 63. Cattle Raisers’ Ass’n of Texas et al. v. United 
States. 

No. 64. Board of Trade of Kansas City et al. v. United 
States. 

No. 66. International Salt Co. of Illinois et al. v. 

United States and Interstate Commerce Commission. 
No. 67. Houston , East & West Texas Ry. Co. et al. v. 
United States. 

No. 68. The Texas & Pacific Ry. Co. v. United fitates. 

59 






OPINIONS OF THE UNITED STATES COMMERCE COURT, 


ALL OPINIONS HANDED DOWN TO DATE. 


JUNE 11, 1912. 


61 

















































































































United States Commerce Court 


No. 1.— April Session, 1911. 


Southern Pacific Company and The Atchison, 
Topeka & Santa Pe Railway Company, peti¬ 
tioners, 

v . 

Interstate Commerce Commission, respondent. 

United States, Pacific Coast Jobbers and Manu- 
facturers’ Association and Associated Jobbers 
of Los Angeles, intervening respondents. 

Mr. Robert Dunlap, Mr. H. A. Scandrett, and 
Mr. C. W. Durbrow, with whom Mr. T. J. Norton, 
Mr. F. G. Dillard ., Mr. W. R. Kelly, Mr. P. F. 
Dunne, Mr. Gardiner Lathrop, and Mr. W. F. Her¬ 
rin were on the brief, for the petitioners. 

Mr. J. A. Fowler, Assistant to the Attorney Gen¬ 
eral, and Mr. Blackburn Esterline, special assistant 
to the Attorney General, for the United States. 

Mr. P. J. Farrell, for the Interstate Commerce 
Commission. 

Mr. Seth Mann, for the intervening shippers. 

Before Knapp, Presiding Judge, and Archbald, 
Hunt, Carland, and Mack, Judges. 


83 




64 


OASES BROUGHT IN THE COMMERCE COURT. 


[July 20,1911.] 

Oakland, Judge: 

The bill in this case was filed for the same pur¬ 
pose as the bill in case hTo. 2, Atchison, Topeka & 
Santa Fe Railway Co., Southern Pacific Co., and 
San Pedro, Los Angeles & Salt Lake Railroad Co. 
v. Interstate Commerce Commission and United 
States, except that the switching service for which 
a charge is claimed is performed at the city of San 
Francisco, Cal. 

For the reasons stated in the opinion filed in case 
No. 2, above mentioned, the motion for a temporary 
injunction made by the petitioners is granted, and 
the motion to dismiss made by the United States 
and the Interstate Commerce Commission is 
denied , 

Mack, Judge, dissenting. 


United States Commerce Court. 


No. 2. —April Session, 1911. 


The Atchison, Topeka & Santa Fe Railway 
Company, Southern Pacific Company, and San 
Pedro, Los Angeles & Salt Lake Railroad Com¬ 
pany, petitioners, 

v. 

Interstate Commerce Commission, respondent. 

United States, Pacific Coast Jobbers and Manu- 
facturers’ Association, and Associated Jobbers 
of Los Angeles, intervening respondents. 

Mr. Robert Dunlap, Mr. E. A. Scandrett, and 
Mr. C. W. Durbrow with whom Mr. T. J. Norton, 
Mr. F. C. Dillard, Mr. W. R. Kelly, Mr. P. F. 
Dunne, Mr. Gardiner Lathrop and Mr. W. F. 
Herrin were on the brief, for the petitioners. 

Mr. J. A. Fowler, Assistant to the Attorney Gen¬ 
eral, and Mr. Blackburn Esterline, special assistant 
to the Attorney General, for the United States. 

Mr. P. J. Farrell, for the Interstate Commerce 
Commission. 

Mr. Seth Mann, for the intervening shippers. 

Before Knapp, Presiding Judge, and Archbald, 
Hunt, Carland, and Mack, Judges. 

48250—S. Doc. 789, 62-2-5 


65 




66 CASES BROUGHT IN’ THE COMMERCE COURT. 

[July 20, 1911.] 

Oakland, Judge: 

This case has been submitted upon a motion for 
a temporary injunction made by the petitioners, 
and upon a motion to dismiss made by the United 
States and the Interstate Commerce Commission. 
The motion to dismiss is made by virtue of the pro¬ 
visions of section 1 of the act to create a Commerce 
Court, which allows such a motion to be made where 
it is claimed the petition does not set forth a cause 
of action. As determinative of these motions, our 
view is necessarily limited to the facts, which are 
well pleaded in the petition. These facts, as they 
appear in the petition, are substantially as follows: 

The petitioners are railroad corporations, organ¬ 
ized under the laws of the States of Kansas, Ken¬ 
tucky, and Utah, respectively. At all times each 
of said petitioners and their respective predecessors 
in interest have maintained and do now maintain 
public freight depot buildings theretofore, respec¬ 
tively, established by them in said city of Los 
Angeles upon or adjacent to their respective tracks 
connecting with their respective main tracks in said 
city where freight in less than carload lots is and 
has been received for transportation for shippers 
in said city destined to various points upon their 
respective lines of railroad or points upon connect¬ 
ing lines of railroad in the United States, and where 


CASES BROUGHT IN THE COMMERCE COURT. 67 

such freight transported from various points to Los 
Angeles is delivered to the owners or consignees 
thereof. 

Each of said petitioners and their respective 
predecessors in interest have also located and estab¬ 
lished and have maintained and do now maintain 
what are known as “team tracks” and freight sheds 
connected with their respective main tracks in said 
city of Los Angeles where cars are set for the ac¬ 
commodation of the public in general for the load¬ 
ing therein of carload freight for transportation to 
various points upon their respective lines of rail¬ 
road in the United States, and where also is set and 
placed for the unloading thereof by consignees or 
owners in said city, who have not been favored with 
the private or special sidetrack facilities herein¬ 
after mentioned, carload freight consigned and 
transported from various points on their respective 
lines of railroad or points on other lines of railroad 
in the United States or elsewhere to such owners 
or consignees in said city of Los Angeles; and said 
team tracks and freight sheds are so connected with 
the respective main line tracks of the petitioners in 
said city that cars loaded with carload freight may 
be readily transferred from said main line tracks to 
said team tracks and sheds; and where empty cars 
intended to be loaded with carload freight for 
transportation may be set and readily transferred 
when loaded from said places to the tracks upon 
which trains are made up; and the said team tracks 


68 CASES BROUGHT IN THE COMMERCE COURT. 

and freight sheds constitute and have constituted the 
places wher,e the respective petitioners receive and 
have heretofore received and have delivered and do 
now make deliveries of carload freight from and to 
the public in general in the said city of Los An¬ 
geles ; and the same are and have been in all respects 
sufficient and adequate for and fully accommodate 
those desiring such service. 

Said main tracks, team tracks, sheds and build¬ 
ings above shown constitute the places established 
as depots or stations by each of the petitioners in 
said city of Los Angeles for the receipt, handling 
and delivery of carload and less than carload 
freight intrastate and interstate. Said facilities so 
established and maintained for the receipt, hand¬ 
ling and delivery of less than carload freight are 
sufficient for the handling of double the amount 
of such freight that has been tendered, is tendered, 
or at any day can be tendered. The freight sheds 
and team tracks established and maintained for 
the receipt, handling and delivery of carload 
freight are sufficient to handle all the carload 
freight coming into or shipped from said city 
either for delivery on said team tracks or for de¬ 
livery on any of the industrial tracks. Said sheds 
and team tracks so maintained and established are 
sufficient to handle more than double the number 
of carloads of freight coming into or going out of 
Los Angeles, whether originating on or destined 
to said team tracks or originating at or destined to 


CASES BROUGHT IN THE COMMERCE COURT. 69 

the industrial tracks hereinafter referred to; and 
on said team tracks and at said sheds without in¬ 
convenience to them more than double the amount 
of all carload freight can be received, handled and 
delivered. In addition to this each of petitioners 
has in connection with its said depots or stations 
a considerable amount of vacant land upon which 
it can and will as the requirements of the public 
may demand place other sheds and team tracks; 
so that there is no necessity in the proper conduct 
of petitioners’ business or in the rendering of 
proper service to shippers in said city to have or 
maintain the industrial tracks hereinafter referred 
to. But for the accommodation of certain ship¬ 
pers and for their benefit in loading and unloading, 
shipping and receiving freight, and to save them 
the expense of cartage which they otherwise would 
have to pay, and which is paid by the public not 
favored with industrial tracks, industrial tracks 
have been built as hereinafter more fully set forth. 

Each of the petitioners, as well as their respective 
predecessors in interest, have heretofore severally 
or individually entered into contracts or agree¬ 
ments with certain individual shippers in Los 
Angeles or with parties who had constructed or 
were contemplating the construction and operation 
of plants or industries in said city, for the con¬ 
struction of spur tracks from the respective plant or 
industry in said city to and connecting with the yard 
tracks of the respective petitioners in said city where 


70 CASES BROUGHT IN THE COMMERCE COURT. 

trains of cars are made up or distributed, a part 
of the cost of such spur track being generally borne 
by the railway company and a part by such shipper. 
But such tracks were constructed especially to ac¬ 
commodate the plant or industry in question and 
to relieve the owner or operator thereof from the 
necessity of receiving at or delivering to the team 
tracks of the respective petitioners carload freight 
consigned to or shipped by the owner or operator 
of said plant, and therefrom and thereby the owner 
or operator of such plant or industry located upon 
such spur or side track was relieved from the ne¬ 
cessity of transferring carload freight to and from 
said team tracks and from or to such plant or in¬ 
dustry by dray or wagon at a higher cost and 
greater risk; and that the shipper at such industry 
or plant by reason of such side-track facilities is 
given or accorded a decided advantage over other 
shippers in Los Angeles who were not favored with 
such spur tracks. 

In such contracts it was generally stated that at 
the request of the shipper or owner of the proposed 
plant the railway company would construct and 
maintain for a limited number of years, usually less 
than five, a spur track to connect such plant or in¬ 
dustry with the railroad of the railway company. 
But in such contracts it was generally provided 
that while the railway company might make use of 
the proposed track for its incidental purposes such 
use should not interfere with the movement or use 


CASES BROUGHT IN THE COMMERCE COURT. 


71 


thereon of cars switched to or from such plant or 
industry but that the traffic to and from such plant 
or industry should be given a preferential right in 
the use of such tracks. 

In the contracts made by the Southern Pacific 
Co. covering the construction and maintenance of 
such industrial or spur tracks it was generally pro¬ 
vided, among other things, as follows: 

“ 1. Undersigned (shipper) will pay cost of con¬ 
structing above-described track (rails, splices, bolts, 
switches, frogs, switch stands, and connections to be 
furnished by and at the cost of Southern Pacific 
Co.), whether such cost may be more or less than 
amount of foregoing approximate estimate. 

“ 2. Said track shall be under full control of 
Southern Pacific Co., and may be used at discretion 
of said company for shipments or delivery of any 
freight, but the business of the undersigned shall 
always have preference. 

“ 3. All material in said track furnished at ex¬ 
pense of Southern Pacific Co., whether in original 
construction or by any way of replacements or re¬ 
pairs, shall be and remain exclusive property of 
Southern Pacific Co., and said Southern Pacific 
Co. shall keep said track in repair. 

“ 4. In case said track shall not be used by under¬ 
signed for period of one year, said Southern Pa¬ 
cific Co. may, at its option, remove said track. 

“ 5. All goods shipped from or to said track by 
rail, routing of which is controlled, or may be rea- 


72 CASES BROUGHT IN THE COMMERCE COURT. 

sonably held to be controlled, by or through under¬ 
signed, shall, when forwarded, be over such rail¬ 
roads as may be selected by Southern Pacific Co., 
provided rate of charge shall be as low as that from 
or to point in question by any other rail route. ” 

The contracts made for such purposes by the 
Atchison, Topeka & Santa Pe Railway Co. con¬ 
tained among other things the following provisions: 

“ The title to said track, and to all the rails, ties, 
bolts, switches, fastenings, and fixtures connected 
therewith, and to all other property which may be 
furnished by the railway company in the mainte¬ 
nance of said track, shall at all times be and remain 
in said railway company, and said railway com¬ 
pany may use the same for other purposes than the 
delivery of freight to or the receipt of freight from 
the second party, provided that such use shall in¬ 
convenience the business of the second party as 
little as possible consistent therewith; and at any 
time after the termination of this contract or the 
obligation of the railway company, as herein pro¬ 
vided, to maintain such track, the railway com¬ 
pany shall have the right to remove said track and 
every part thereof. ’ 7 

The contracts made by the San Pedro, Los An¬ 
geles & Salt Lake Railroad Co. covering the cost 
and maintenance of such spur or industrial tracks 
contained provisions similar to those of the South¬ 
ern Pacific Co. above set forth. 

Industries or plants in said city of Los Angeles 
located upon spur tracks heretofore constructed 


CASES BROUGHT IN THE COMMERCE COURT. 


73 


under contract, as aforesaid, by the Atchison, To¬ 
peka & Santa Fe Railway Co., or its predecessors 
in interest, in said city of Los Angeles, are distant 
from its main track in said city anywhere from 
one-fifth to li miles, and in order to receive a car¬ 
load of freight from such plant or industry it will 
be as it has been necessary to switch from the main 
track or yards of the said petitioner an empty car 
and set the same at such industry where the same 
can be conveniently loaded by the shipper, and such 
car when loaded must then be switched over such 
spur track and to the yard tracks to be placed in an 
appropriate train for transportation to destina¬ 
tion; and where a carload of freight is consigned 
to the operator of such plant or industry it is and 
has been necessary to switch the same from the 
yards of said petitioner over said spur track to the 
industry or plant in question and to place the same 
convenient thereat for unloading, and in many 
instances the empty car is required to be switched 
or transferred in being returned from such plant to 
the general yards of petitioner. 

Industries or plants in the said city of Los An¬ 
geles located upon the spur tracks heretofore 
constructed under contract as aforesaid by the 
Southern Pacific Co., or its predecessor in interest, 
in said city of Los Angeles are distant from its main 
track in said city anywhere from 200 feet to 7 miles, 
and in order to receive a carload of freight from 
such plant or industry it will be as it has been nec¬ 
essary to switch from the main track or yards of 


74 CASES BROUGHT IN THE COMMERCE COURT. 

said petitioner an empty car and set the same at 
such industry where the same can be conveniently 
loaded by the shipper, and such car when loaded 
must then be switched over such spur track and to 
the yard tracks to be placed in an appropriate 
train for transportation to destination; and where 
a carload of freight is consigned to the operator of 
such plant or industry it is and has been necessary 
to switch the same from the yards of said petitioner 
over said spur to the industry or plant in question 
and to place the same conveniently thereat for un¬ 
loading, and in many instances the empty car is 
required to be switched or transferred in being 
returned from such plant to the general yards of 
petitioner. 

Industries or plants in said city of Los Angeles 
located upon spur tracks heretofore constructed 
under contract as aforesaid by the San Pedro, Los 
Angeles & Salt Lake Railroad Co. in said city are 
distant from its main track in said city anywhere 
from one-fifth to 4 miles, and in order to receive a 
carload of freight from said plant or industry it 
will be as it has been necessary to switch from the 
main track or yards of said petitioner an empty car 
and set the same at such industry where the same 
can be conveniently loaded by the shipper, and such 
car when loaded must then be switched over such 
spur track and to the yard tracks to be placed in an 
appropriate train for transportation to destina¬ 
tion; and where a carload of freight is consigned to 
the operator of such plant or industry it is and has 


CASES BROUGHT IN THE COMMERCE COURT. 75 

been necessary to switch the same from the yards of 
said petitioner over said spur track to the industry 
or plant in question and to place the same conven¬ 
ient thereat for unloading, and in many instances 
the empty car is required to be switched or trans¬ 
ferred in being returned from such plant to the 
general yards of petitioner. 

In such contracts governing the construction and 
maintenance of such industrial tracks no specific 
sum was fixed or prescribed in case the railway 
company should perform the aforesaid special serv¬ 
ice of receiving or delivering freight at the plant or 
industry in question, but at the time of executing 
such contract the usual charge separately and spe¬ 
cially set forth in the respective tariffs of petition¬ 
ers for making such special deliveries or such spe¬ 
cial receipt of such carload freight, involving the 
switching service to and from such plant or indus¬ 
try from and to the yards of respective petitioners 
where trains are made or broken up, had been gen¬ 
erally established by each petitioner at the sum or 
price of $2.50 per car, and had for many years and 
since the installation of industry tracks in said city 
been paid by the shippers using such tracks, and at 
the time of making such special agreements ship¬ 
pers entering into the same understood and will¬ 
ingly consented that if the railway company per¬ 
formed such special service a charge therefor in 
addition to the freight rate from and to Los Angeles 
would be made, and such charge of $2.50 per car 
has generally been made, maintained and collected 


76 CASES BROUGHT IN THE COMMERCE COURT. 

from said shippers in Los Angeles for said special 
service as aforesaid. 

The aforesaid service heretofore rendered by 
the respective railway companies of receiving car¬ 
load freight at said industries or delivering the 
same to such industries or plants instead of at the 
team tracks or sheds is of great value to the owners 
or operators of such industries or plants and is 
worth much more than the sum of $2.50 per car in¬ 
asmuch as a great saving is made by such indus¬ 
tries by reason of being relieved of the necessity 
of paying drayage or other charges which would 
be involved in the receipt or delivery of carload 
freight at the team tracks or sheds, and risk of 
damage to such freight is materially lessened, and 
shippers who have been thus favored by the con¬ 
struction under special agreement of such spur 
tracks to and from their industries and by the re¬ 
ceipt and delivery of freight thereat are greatly 
favored and are and have been accorded a decided 
advantage over other shippers in said city with 
whom such contracts have not been made or entered 
into. The general or prevailing charge for dray¬ 
age in Los Angeles is 50 cents a ton, which makes 
the cost to the consignee $7.50 on a carload of 15 
tons, $10 on a carload of 20 tons, $15 on a carload 
of 30 tons, $20 on a carload of 40 tons, $25 on a 
carload of 50 tons, and so on, as against the charge 
of $2.50 imposed by petitioners for delivering the 
consignment to or receiving the shipment at the 
door of the consignee’s or shipper’s warehouse. 


CASES BROUGHT IN THE COMMERCE COURT. 77 

In performing said special switching service 
involved in the receipt and delivery of carload 
freight at such industry or plant, petitioners are 
put to a much greater expense than if such freight 
was received or delivered on its team tracks or at 
its freight sheds. 

Each of petitioners has made and established its 
rates of transportation to and from said city of 
Los Angeles from and to such points on their re¬ 
spective lines, and in many instances joint rates 
from and to points on many other railroads in the 
United States; they have duly published and filed 
with the Interstate Commerce Commission and 
posted in their respective stations where freight is 
received their respective schedules or tariffs of 
rates governing or concerning interstate trans¬ 
portation of freight in which rates are prescribed 
for less than carload lots and for carload freight ; 
and in respect to less than carload freight the rates 
have been established and made to cover the re¬ 
ceipt or delivery of such freight at the freight sta¬ 
tion of the respective railway company in said city; 
and in respect to carload freight the rates estab¬ 
lished for the public in general contemplate receipt 
or delivery thereof upon or at the team tracks or 
sheds of the respective railway company; and in 
said tariffs it has been and is distinctly and sep¬ 
arately provided and stated that where carload 
freight is received at or delivered to private indus¬ 
tries located upon such industry tracks in said city 
of Los Angeles an additional charge—that is, a 


78 CASES BROUGHT IN THE COMMERCE COURT. 

charge in addition to the rate fixed to and from 
Los Angeles, amounting to $2.50 per car—will be 
charged and collected for said special service of 
making delivery or receipt of carload freight to or 
at said plants or industries located in said city of 
Los Angeles upon such special industry tracks. 

On account of water and other competition the 
rates of transportation to and from Los Angeles 
have been forced to an exceedingly low basis so 
that petitioners do not receive for such transporta¬ 
tion sums which they are justly entitled to and 
which they would otherwise be able to charge and 
collect. 

On or about April 5, 1910, the Interstate Com¬ 
merce Commission, having investigated the com¬ 
plaint of the Associated Jobbers of Los Angeles 
against petitioners wherein said charge of $2.50 
per car was claimed to be unjust and illegal, made 
the following order: 

“ This case being at issue on complaint and an¬ 
swers on file and having been duly heard and sub¬ 
mitted by the parties, and full investigation of the 
matters and things involved having been had, and 
the commission having, on the date hereof, made 
and filed a report containing its findings of fact and 
conclusions thereon, which said report is hereby 
referred to and made a part hereof, and having 
found that the present charge of $2.50 per car ex¬ 
acted by the several defendants for delivering and 
receiving carload freight to and from industries 
located upon spurs and sidetracks within their re- 


CASES BROUGHT IN THE COMMERCE COURT. 79 

spective switching limits at Los Angeles, Cal., when 
such carload freight is moving in interstate com¬ 
merce incidentally to a system-line haul, is in viola¬ 
tion of the act to regulate commerce: 

“ It is ordered, That said defendants be, and they 
are hereby, notified and required to cease and desist, 
on or before the 1st day of July, 1910, and for a 
period of not less than two years thereafter abstain, 
from exacting their present charge of $2.50 per car 
for delivering and receiving carload freight to and 
from industries located upon spurs and sidetracks 
within their respective switching limits in the said 
city of Los Angeles, Cal., when such carload freight 
is moving in interstate commerce incidentally to a 
system-line haul. 

“ It is further ordered, That said defendants be, 
and they are hereby, notified and required to cease 
and desist, on or before the 1st day of July, 1910, 
and for a period of not less than two years there¬ 
after abstain, from exacting any charge whatever, 
other than the charge for transportation from 
points of origin to destination, for delivering or re¬ 
ceiving carload freight to or from industries located 
upon spurs or sidetracks within their respective 
switching limits in the said city of Los Angeles, 
Cal., when such carload freight is moving in inter¬ 
state commerce incidentally to a system-line haul.” 

Petitioners complain that said order deprives 
them of all compensation for the said special serv¬ 
ices so rendered by them respectively, and that said 
order is by reason thereof illegal and void. The 


80 CASES BROUGHT IN THE COMMERCE COURT. 

petition prays that said order be annulled and that 
the Interstate Commerce Commission be perpetu¬ 
ally enjoined from the enforcement thereof. 

Whether or not the facts stated in the petition 
constitute a cause of action depends upon the ques¬ 
tion whether the petitioners have the lawful right 
to make the charge of $2.50 per car for the indus¬ 
trial track service mentioned. In the absence of 
special contract or usage to the contrary, under the 
common law carriers by land are bound to deliver 
or tender goods to the consignee at his residence or 
place of business, and until this is done they are not 
relieved from responsibility as carriers. This rule, 
however, never was applied to railroads. They are 
exempt from the duty of personal delivery, and 
bound only to carry the goods to the depot or sta¬ 
tion to which they are destined and there hold or 
place them in a warehouse ready for delivery when¬ 
ever the consignee or owner calls for them, after 
notifying the consignee or owner of their readiness 
to deliver. 

Fenner v. Buffalo, etc., B. Co., 44 N. Y., 505. 

Whitbcck v. Holland, 45 N. Y., 13. 

Chalk v. Charlotte, etc., B. Co., 85 N. C., 423. 

South, etc., Alabama B. Co. v. Wood, 66 Ala., 167. 

New Orleans, etc., B. Co. v. Tyson, 46 Miss., 729. 

State v. Republican Valley B. Co., 17 Nebr., 617. 

Francis v. Dubuque, etc., B. Co., 25 Iowa, 60. 

Evershed v. London, etc., B. Co., 2 Q. B. Div., 254. 

The order of the Interstate Commerce Commis¬ 
sion complained of makes the report of the com- 


CASES BROUGHT IN THE COMMERCE COURT. 81 

mission a part thereof and as said order is set out 
in the petition the report also becomes a part of 
said petition. It is found in the order of the Com¬ 
mission that the charge of $2.50 per car exacted by 
the several petitioners for delivering and receiving 
carload freight to and from industries located upon 
spurs and side tracks within their respective 
switching limits at Los Angeles, Cal., when such 
carload freight is moving in interstate commerce 
incidentally to a system-line haul is in violation of 
the act to regulate commerce. This conclusion is a 
conclusion of law and of course is open to inquiry 
in this court. It is not stated in the order itself 
what particular section of the act to regulate com¬ 
merce the charge of $2.50 per car for the services 
rendered by petitioners violates, but as the report 
of the commission is made a part of the order we 
are at liberty to examine said report with a view of 
ascertaining the views of the commission as to what 
particular provision of the act to regulate com¬ 
merce the practice or charge of petitioners violates. 
In this examination we are limited to the report or 
opinion of the majority of the Commission, the 
views of the minority not being open to considera¬ 
tion. (Interstate Commerce Commission v. Bela- 
ivare, L. & W. F. F. Co., 220 U. S., 235.) 

In the report of the Commission we find the fol¬ 
lowing language (18 I. C. C. Rep., 310) : 

“ The basic theory of the complainant’s case is 
that these industry spurs are part of the receiving 

48250—S. Doc. 789, 62-2-6 


352 CASES BROUGHT IN THE COMMERCE COURT. 

and delivering systems of the carriers, which theory 
is met by the defendants with the proposition that 
these spurs are essentially plant facilities con¬ 
structed for the convenience of the shipper rather 
than that of the carrier. In a sense and within 
proper limitations both of these contentions are 
sound. ’ ’ 

Again, it is said in the report, as follows: 

“ We are fully convinced that the complainant’s 
view of the nature of these tracks is correct and 
that they are portions of the terminal facilities of 
the carrier with whose lines they connect, and, to¬ 
gether with the team tracks and other yards, form 
the terminal facilities of these carriers.” 

It is also stated in said report: 

u We do not find in the record sufficient data upon 
which to base a finding as to the reasonableness of 
the amount of this charge of $2.50 for interline 
switching to these industrial tracks, and for the 
purpose of this present order will assume it to be 
reasonable.” 

Again, quoting from the report: 

u The service here under consideration, however, 
is a delivery service and nothing more; the delivery 
being made at one of the carrier’s tracks which is 
removed at a greater or less distance from its public 
yards. Spur-track delivery is a substitute service, 
a service which it has solicited the right to give, as 
the evidence here shows, a service which costs the 
industry for the installation of the track and the 


CASES BROUGHT IN THE COMMERCE COURT. 


83 


use of its property as a railway terminal. It is a 
service over the carrier’s own rails to a point where 
it yields possession of the property transported and 
which involves no greater expense than would team- 
track delivery. It relieves the carrier’s team tracks 
and sheds, necessitating less outlay for expense of 
yards in a crowded city, promotes the speedy release 
of equipment, and vastly aids in conducting a com¬ 
merce which is greater than the carrier’s own facil¬ 
ities could freely, adequately, and economically 
handle.” 

The Commission condemned the charge of $2.50 
per car made by the petitioners for delivering and 
receiving interstate carload freight to and from 
industries located upon spurs or sidetracks within 
their respective switching limits when such carload 
freight was moving incidentally to a system-line 
haul as illegal and unjust. As the Commission did 
not find the charge of $2.50 to be excessive in and 
of itself, we conclude that the Commission found 
that the charge violated section 1 of the act to regu¬ 
late commerce, the charge being unjust because on 
the theory of the report of the Commission the car¬ 
rier had already been paid for this service by pay¬ 
ment of the regular tariff from point of origin to 
destination. 

It is claimed by counsel for the United States, 
under the decisions of the Supreme Court in Inter¬ 
state Commerce Commission v. Illinois Central R. 
R. Co. (215 U. S., 415) ; Baltimore & Ohio R. R. 


84 CASES BROUGHT IN THE COMMERCE COURT. 

Co. v. Pitcairn (215 U. S., 481) ; and Interstate 
Commerce Commission v. Delaware, L. & W. By. 

Co. (219 U. S.,-), that the findings thus made 

by the Commission are conclusive upon this court, 
and that these findings forming a part of the peti¬ 
tion, it conclusively appears therefrom that no 
cause of action has been stated which would war¬ 
rant this court, taking all the allegations of the 
petition as true, in granting the relief prayed for. 
We are not unmindful of the rulings of the Supreme 
Court in the cases mentioned in regard to the force 
and effect to be given to the findings of the Com¬ 
mission and have no disposition in any way to avoid 
the binding force of such rulings. We think that it 
is fair to say that the conclusion of the Commission 
that the charge of $2.50 per car for the service 
named was illegal and unjust was based upon two 
findings: First, that the industrial track upon 
which the service was rendered is a terminal facility 
of the railroad and not a plant facility of the in¬ 
dustry to which it leads; and, second, that the serv¬ 
ice for which the charge is made is the same service 
as that which is performed by the carrier in 
delivering freight at its depot or team tracks. 

We do not think that whether the industrial 
track is a plant facility or a terminal facility of 
the railroad necessarily determines the legality of 
the charge. The commission in one part of its re¬ 
port found that the contentions of both parties 
within certain limits were sound. The real ques¬ 
tion presented is: “ Is the carrier lawfully entitled 



CASES BROUGHT IN THE COMMERCE COURT. 85 

to charge the sum of $2.50 per car for the service 
performed upon the industrial tracks ?” And we 
do not think that question can be determined alone 
by the consideration whether the industrial track 
is a plant facility or a terminal facility of the 
railroad, for the reason that it is the service 
which is performed upon the industrial track that 
is the question, regardless of the ownership of the 
track. 

So far as the finding of the Commission that the 
industrial track service is the same as the team 
track or depot service is concerned, we are con¬ 
strained to hold that it is not a finding which pre¬ 
cludes this court from coming to a different conclu¬ 
sion upon the present record. In cases where there 
is a substantial conflict in the evidence or testimony 
upon which a finding of the Commission is based, 
we would feel bound by the finding unless clearly 
and palpably against the weight of the testimony; 
but we do not think that this court is concluded by 
a finding of the Commission based upon admitted 
facts which in no wise tend to sustain the conclu¬ 
sion reached. In other words, as in this case, where 
all the facts are undisputed, we do not think that 
the Commission can by an ultimate finding based 
upon the undisputed facts preclude Ihis court from 
reaching a conclusion of its own upon such undis¬ 
puted and admitted facts. Where the facts are un¬ 
disputed there is no occasion for facts to be found, 
and the ultimate conclusion of the commission is a 


86 CASES BROUGHT IN THE COMMERCE COURT. 

mixed question of law and fact which certainly 
ought not to be held to be conclusive upon this 
court. 

To say that the transportation of cars and freight 
to and from industrial plants located from one- 
fifth of a mile to 7 miles from the main track of the 
carrier is the same service which the carrier per¬ 
forms and for which it is paid by the general tariff 
charge when it delivers freight at its depot in Los 
Angeles, or at the team tracks, is so contrary to the 
admitted physical facts as to be wholly untenable. 
It seems clear to us that in the absence of statute 
the carriers in the present case are not bound to 
perform this industrial track service and if they 
voluntarily perform it under an arrangement with 
the owner of the industrial plant we see no reason 
why they may not charge a reasonable price there¬ 
for, and the charge in question is conceded to be 
reasonable. 

We are not at liberty to view the case at this time 
except as it appears from the petition, and we are 
wholly unable to come to the conclusion from the 
facts therein stated, which are to be taken as ad¬ 
mitted for the purpose of this motion, that the indus¬ 
trial or spur track service is the same service that 
the carrier performs by delivery to the team tracks 
or at the depot, and therefore are unable to say that 
the general tariff charge on freight shipped to Los 
Angeles from points of origin would include a de¬ 
livery at the industrial plant. Nor are we able to 
see how it can be said that the general tariff charge 


CASES BROUGHT IN THE COMMERCE COURT. 87 

includes a delivery at the industrial plant. When 
it is said that the general tariff charge for the trans¬ 
portation of freight to Los Angeles pays for the 
delivery of such freight at the industrial plant, 
upon what authority is this declaration made! 
Who is to say that it pays for delivery at the indush 
trial plant? The carrier, in the first instance, is 
entitled to fix its tariff charges for the transporta¬ 
tion of freight, and in this instance has fixed a cer¬ 
tain tariff for the delivery of freight to Los 
Angeles. At the same time that it fixed this gen¬ 
eral tariff it fixed a tariff, which it filed with the 
Interstate Commerce Commission, for this indus¬ 
trial track service, so that the only party in the first 
instance that had anything to say about what the 
general tariff charge should be was the carrier, 
and it has said that the general tariff charge only 
carries the freight to the depot or the team tracks. 
There is no evidence whatever that the carrier ever 
waived in any way its right to charge for the spe¬ 
cial service on the industrial tracks. There may be 
conditions under which the carrier may waive its 
right to make a charge for terminal service, as was 
said in Interstate Commerce Commission v. Stick - 
ney (215 L T . S.. 105) : 

“ The carrier is under no obligation to charge far 
terminal services. Business interests may justify 
•it in waiving any such charge, and it will be con¬ 
sidered to have waived it unless it makes plain to 
both shipper and Commission that it is insisting 
upon it.” 


88 CASES BROUGHT IN THE COMMERCE COURT. 

The petition in the present case shows that before 
these tracks were constructed this charge was con¬ 
tained in the general tariffs of petitioners and that 
said charge for industrial track service was known 
to the different proprietors and owners of indus¬ 
trial plants and that they consented to such charge. 
It is admitted of course that such consent or im¬ 
plied contract on the part of the industrial plant 
owners would be avoided if it was in conflict with 
any law of Congress regulating interstate com¬ 
merce. If the carrier is not bound by law to de¬ 
liver freight at the industrial plant, and it can not 
be successfully contended that it is, then it follows 
as a necessary consequence that this industrial 
track service is a special service and is not a service 
which the carrier is bound to perform for the gen¬ 
eral tariff charge for the transportation of freight 
destined to Los Angeles. 

The Commission made no finding that the charge 
of $2.50 in connection with the transportation of 
cars to and from industrial plants constituted an 
undue preference or advantage or was discrimi¬ 
natory in any way, and these questions if they exist 
at all will not be discussed. 

From what has been stated in this opinion as the 
views of this court, it necessarily results that the 
motion to dismiss must be denied, and an order will 
be granted suspending the order of the Interstate 
Commerce Commission complained of until the 
further order of this court. 


CASES BROUGHT IN THE COMMERCE COURT. 


89 


Mack, Judge, dissenting: 

In my opinion the finding of the Commission, 
that the industry track service in the city of Los 
Angeles is substantially the same as the team-track 
and depot service, is binding upon this court, I 
agree that this court should not be concluded by a 
finding of the Commission, based upon admitted 
facts which in no wise tend to sustain the conclu¬ 
sion reached, but in my judgment the facts in this 
case, as related by the Commission in its report, 
fully justify its conclusions. The Commission finds 
as follows: 

“ Each of the carriers here involved has desig¬ 
nated certain territory as within its switching or 
yard limits in the city of Los Angeles, extending for 
6 or 7 miles in a general easterly and westerly direc¬ 
tion, and including numerous tracks, main lines, 
branch lines, industry spurs, classification tracks, 
team tracks, repair tracks, and others, and also 
their stations, freight sheds, derricks, roundhouses, 
and other structures. Freight moving in carloads 
is delivered at team tracks, at freight sheds, or at 
industry spurs. * * * 

“ These industry spurs are not private, in that 
the carrier may use them for purposes of its own— 
as for storage of cars, as leads to other industries, 
and sometimes for public delivery. They are often 
laid upon public streets and over private property, 
are operated exclusively by the railroad with its 
own engines, and furnish means of interindustry 


90 


CASES BROUGHT IN THE COMMERCE COURT. 


conveyance by rail, for which the carrier properly 
imposes a switching charge. * * * 

“We are fully convinced that the complainant’s 
view of the nature of these tracks is correct, and 
that they are portions of the terminal facilities of 
the carrier with whose lines they connect, and, to¬ 
gether with the team tracks and other yards, form 
the terminal facilities of these carriers. * * * 

“ Again, it is not to be overlooked that the de¬ 
livery given on an industry spur is not supple¬ 
mental to any other delivery. Cars destined to 
industry spurs are not placed first at a spur, depot, 
or on the team tracks, or at the sheds, and later 
switched to oblige the consignee. A train of freight 
cars goes to the breaking-up yards which lie at the 
entrance to the city, and there it is divided up with 
respect to the character of the freight in the various 
cars and their destination. No one has access to 
the cars at this point. This yard is purely a rail¬ 
road facility. After the cars are Segregated they 
are taken to the tracks to which they are ordered— 
some to the various team tracks distributed along 
the main line, some to different industries, some 
perhaps to the railroad shops or to freight sheds or 
to the stock yards. * * * After a most exhaus¬ 
tive inquiry we can not find, taking this service as a 
whole in the same way that it is treated by the car¬ 
riers, that the service is more expensive to the 
carrier than if all cars were given team-track 
delivery. ’ ’ 


CASES BROUGHT IN THE COMMERCE COURT. 91 

If, then, these industry tracks are, as the Com¬ 
mission in my judgment correctly finds them to be, 
terminal facilities of the railroad, and if, as the 
Commission further finds, the service for which the 
charge in question is made is substantially the same 
service as that which is performed by the carrier in 
delivering freight on its team tracks, the Commis¬ 
sion was justified in prohibiting, as an unreason¬ 
able practice, the additional, so-called switching 
charge made for the delivery at the industry tracks. 

While under the American practice, as distin¬ 
guished from the English practice, the transporta¬ 
tion rate has always included the charge for the use 
of the ordinary terminal facilities, that is, the use 
of depots or tracks for the purpose of delivery, it 
may well be that, the Commission has the right, in 
regulating the practices of the carriers, to require 
a separation of the transportation rate into its ele¬ 
ments. It may well be that the dangers of undue 
preferences and unjust discriminations in favor of 
large industries, which can afford to have industry 
tracks, may not only justify but in the future re¬ 
quire the Commission so to act, and that, too, de¬ 
spite the common law principle enunciated in Cov¬ 
ington Stock Yards v. Keith (139 U. S., 128), and 
conceded in complainant’s brief in the following 
language: 

“ Of course, it may rightfully be assumed that 
the charge established by the carrier for carrying 
goods to and from the given cities does necessarily 
embrace the use of instrumentalities which the car- 


92 CASES BROUGHT IN THE COMMERCE COURT. 

rier must furnish to accomplish the carriage, such 
as engines, cars, the railroad and the depots and 
delivering yards, where goods of the public in gen¬ 
eral may be received and delivered. In other words, 
a double charge may not be imposed for the same 
thing. ’ ’ 

If such action should be taken, shippers located 
on industry tracks, whose cars go directly from the 
breaking-up yards to these tracks, could not be com¬ 
pelled to pay for the use of the team-track terminal 
facilities, but, on the other hand, they could be com¬ 
pelled to pay for the use of terminal facilities on 
the industry tracks. We need not now determine 
whether, in that event, a higher rate for industry 
than for team-track delivery could be permitted or 
compelled if the cost of each delivery, to the car¬ 
rier, were the same, in order to prevent the large 
shipper, located on an industry track, from gain¬ 
ing such advantage as would naturally accrue to 
him from his location. 

The Commission, however, has not yet attempted 
to exercise this possible power. It has acted on the 
basis of the long-established American practice, 
which it was justified in assuming would be con¬ 
tinued. Under that practice the shippers on in¬ 
dustry tracks pay a delivery charge in the regular 
transportation rate. Nothing in the order sought 
to be enjoined compels the railroads to continue to 
maintain the industry tracks or to make delivery 
thereon. If, however, they voluntarily make de¬ 
livery thereon, instead of on their other tracks) 


GASES BROUGHT IN THE COMMERCE COURT. 93 

they are prohibited from exacting additional com¬ 
pensation for a service found to be substantially 
the same as that for which payment has already 
been made. 

Moreover, nothing in the order prevents the rail¬ 
roads from making different transportation 
charges to the various depots or tracks in the city. 
A difference of 7 miles in the length of the haul 
might under some circumstances justify a differ¬ 
ence in the transportation rate. That rate, how¬ 
ever, is not in question on this record. Moreover, 
this extreme difference in the length of some of the 
hauls does not, in my judgment, justify the court 
in holding as untenable the finding of the Commis¬ 
sion, based on a careful consideration of all the 
physical and economic conditions, that industry 
and team-track delivery in these cities are prac¬ 
tically identical. 

The conclusion of the Commission is, in sub¬ 
stance, that inasmuch as under the American prac¬ 
tice no separate charge is made for team-track 
delivery, but only a single charge for transporta¬ 
tion including delivery, a separate charge for the 
similar, no more costly, and voluntarily substituted 
spur-track delivery is an unreasonable practice. 
An order prohibiting the charge is, in my judg¬ 
ment, within the powers granted to it under section 
15 of the act to regulate commerce. 



, 




United States Commerce Court. 


No. 3.— October Session, 1911. 


Atlantic Coast Line R. R.Co. et al., petitioners, 
v. 

Interstate Commerce Commission, respondent, 
United States, M. C. Kiser Co., and J. K. Orr 
Shoe Co., interveners. 


Mr. Alfred P. Thom , Mr. R. Walton Moore, Mr. 
Frank W. Gwathmey, and Mr. John K. Graves for 
petitioners. 

Mr. James A. Fowler and Mr. Blackburn Esterline 
for United States. 

Mr. P. J. Farrell for Interstate Commerce Com¬ 
mission. 

Mr. William A. Wimbish for M. C. Kiser Company 
and J. K. Orr Shoe Company. 

On Demurrer to Bill and motion to dismiss. 

(For report of Interstate Commerce Commission, 
see 17 I. C. C. Rep., 430.) 

Before Knapp, Presiding Judge, and Archbald, 
Hunt, Carland, and Mack, Judges. 

[December 5, 1911.] 

Carland, Judge: 

March 31, 1910, petitioners filed their bill in the 
United States Circuit Court for the Eastern District 

95 





96 CASES BROUGHT IN THE COMMERCE COURT. 

of Virginia against the Interstate Commerce Com¬ 
mission for the purpose of having an order of said 
Commission, dated November 27, 1909, and effective 
April 1, 1910, wherein it was found that the rail and 
water rate of Central of Georgia Railway Company, 
Southern Railway Company, Seaboard Air Line 
Railway Company and the Receivers thereof, Atlantic 
Coast Line Railroad Company, Ocean Steamship 
Company, and Merchants and Miners Transportation 
Company, of $1.05 per 100 pounds for the transporta¬ 
tion of less than carload shipments of boots and shoes 
from Boston and New York to Atlanta, Georgia, to 
the extent that it exceeded 95 cents per 100 pounds, 
was unreasonable, unjust, and unduly discriminatory, 
suspended and annulled. The order also required the 
said companies to cease and desist, on or before 
April 1, 1910, and for a period of not less than two 
years thereafter abstain, from charging, collecting, 
or receiving the rate so held to be unlawful, and to 
establish on or before April 1, 1910, and maintain for 
a period of two years thereafter, a charge for the 
transportation of less than carload shipments of 
boots and shoes by water and rail from Boston and 
New York to Atlanta, Georgia, a rate which should 
not exceed 95 cents per 100 pounds. 

The Commission answered the bill in the United 
States Circuit Court, and the M. C. Kiser Company 
and the J. K. Orr Shoe Company, having been allowed 
to intervene, filed their several demurrers in said court. 
Subsequently the case was transferred to this court, 
and the United States, having here been allowed to 


CASES BROUGHT IN THE COMMERCE COURT. 97 

intervene, filed its motion to dismiss under the stat¬ 
ute. The case is now, after argument, submitted for 
decision upon the demurrer of the M. C. Kiser Com¬ 
pany and J. K. Orr Shoe Company, and the motion 
of the United States to dismiss. The motion to dis¬ 
miss so far as it goes covers the same grounds as the 
demurrer. The demurrer, however, being both gen¬ 
eral and special, specifies as grounds of demurrer other 
matters not specifically mentioned in the motion to 
dismiss. It would seem proper, therefore, to con¬ 
sider the motion to dismiss and the demurrer together. 

Speaking in a general way, the bill presents two 
grounds of attack upon the order of the Commission; 
first, that the rate of 95 cents per hundred pounds 
established by the order for the transportation of 
boots and shoes from Boston and New York to Atlanta 
is so unreasonably low as to deprive petitioners of a 
right guaranteed to them by the fifth amendment to 
the Constitution of the United States in that their 
property will be taken for a public use without just 
compensation; and, second, that said order, while in 
form within the powers of the commission, was such 
an irregular and unreasonable exercise of authority 
as to render it void. The demurrer being special and 
directed to particular paragraphs of the bill, it will be 
necessary to consider the grounds of the demurrer 
separately. 

It is specified as a ground of demurrer that the 
Georgia Railroad, the Norfolk and Western Railway 
Company, Clyde Steamship Company, and Old 
Dominion Steamship Company were not parties to 

48250— S. Doc. 789, 62-2-7 


98 CASES BROUGHT IN THE COMMERCE COURT. 

the proceeding before the Commission which resulted 
in the making of the order complained of, and 
that therefore there is a misjoinder of petition¬ 
ers. It is alleged, however, in paragraphs 4 and 
11 of the bill that the petitioners are and have 
been for at least ten years participating in the rail 
and water transportation of boots and shoes from 
Boston and New York to Atlanta, and the manner 
in which this traffic moves is pointed out. It is 
also alleged that the volume of traffic to which the 
reduction of rates required by the order complained 
of, if enforced, will by the terms thereof apply, is 
very large, and will necessarily and inevitably cause 
corresponding reductions not only by such of the peti¬ 
tioners as are named in said order but by the other 
petitioners as well, in all such less than carload rail 
and water rates on boots and shoes from all the other 
New England and Eastern ports to Atlanta and 
practically to all other Southeastern points; and that 
the volume of such traffic to which such reductions 
will necessarily apply is tremendous in amount, and 
that the revenues of all of the petitioners will be 
greatly and seriously impaired if the order is allowed 
to remain in effect. 

From these allegations, admitted by the demurrer, 
it appears that the petitioners last above named 
have sufficient interest in the rail and water rate to 
be made parties to the suit. (Peavy v. Union Pacific 
Company , 176 Fed. 409. Affirmed by Supreme 
Court November 13, 1911.) 


CASES BROUGHT IN THE COMMERCE COURT. 99 

Another ground of demurrer is that the Ocean 
Steamship Company of Savannah and the Merchants 
and Miners Transportation Company were parties 
defendant to the complaint and proceedings before 
the Commission which resulted in the making of the 
order complained of, and therefore this court can 
grant no relief without their presence. 

It is a sufficient answer to this contention to say 
that this case is not an appeal or writ of error where 
all parties against whom the decree or judgment is 
rendered must join in the appeal or writ, or in lieu 
thereof a summons or severance must be had, but it 
is a plenary suit in equity, and certainly any party 
against whom an order establishing rates is made 
may petition this court for redress without joining 
other parties to the order, the injury, if any, being 
several, and not joint. (Peavy v. Union Pacific Com¬ 
pany, supra.) 

Paragraph 10 of the bill is demurred to upon the 
ground that the petitioners therein named, to wit, 
the Georgia Railroad, Norfolk and Western Railway 
Company, Clyde Steamship Company, and Old 
Dominion Steamship Company, were not necessary 
parties to the complaint before the Commission; 
and if they, as carriers participating in the traffic 
affected, have any just cause of complaint such 
complaint may and should be presented to the Com¬ 
mission, which is authorized by law to grant rehear¬ 
ings and to modify its orders. While we think it is 
entirely proper for parties against whom an order 


100 CASES BROUGHT IN THE COMMERCE COURT. 

has been made to apply to that body for a rehearing, 
we know of no rule that makes it a condition prece¬ 
dent to the bringing of a suit in this court for the pur¬ 
pose of setting aside the order. (.Peavy v. Union 
Pacific Company supra.) 

Paragraph 11 of the bill is demurred to upon the 
ground that it fails to state the volume of the traffic 
affected, the revenues derived therefrom, and to 
what extent these revenues will be affected by the 
enforcement of the order complained of, and upon 
the further ground that the bill fails to state what 
reductions in other rates will necessarily and inevitably 
follow the enforcement of the order, by what carriers, 
and between what points such reductions would be 
made, and the extent of such reductions. The only 
purpose of paragraph 11 is to show that the carriers 
which are complainants in this proceeding and which 
were not parties before the Commission have such an 
interest in the controversy as entitles them to be 
made complainants, and we think the paragraph is 
sufficiently specific for that purpose. 

Paragraph 13 of the bill is demurred to upon the 
ground that no facts are stated to support the con¬ 
clusion that in establishing the rates and charges 
condemned in the order complained of the com¬ 
plainants were not making or giving any undue or 
unreasonable preference or advantage to any ship¬ 
per, locality, or description of traffic, or subjecting 
any special locality or description of traffic to any 
undue or unreasonable prejudice or disadvantage. 


CASES BROUGHT IN THE COMMERCE COURT. 101 

As the commission condemned the rates which 
were complained of only because they were unreason¬ 
ably high, the allegations in paragraph 13 would 
seem to be irrelevant, and for this reason we do not 
stop to consider whether it is sufficiently specific or 
not, but will sustain the demurrer thereto. 

Paragraph 16 is demurred to upon the ground that 
a mere conclusion of law is pleaded and no facts are 
alleged showing wherein the enforcement of the 
order in question will deprive the complainants or 
either of them of any right guaranteed by the Con¬ 
stitution of the United States. An inspection of 
said paragraph shows that it is mere argument and 
therefore is bad on demurrer. 

Paragraph 18 is demurred to upon the ground that 
it is hypothetical, and upon the further ground that 
in order to support the general conclusion therein 
pleaded the bill should show the amount of revenue 
necessary and sufficient for the maintenance of com¬ 
plainants as common carriers in the discharge of their 
duties to the public, and to what extent such revenue 
would be affected by the readjustment of rates upon 
a basis as low as that prescribed by the order com¬ 
plained of. We think the demurrer is well taken, as 
there is nothing to show the extent to which the 
carrier would be compelled to construct and apply its 
other rates upon the basis of the rates named in the 
order complained of. 

Paragraphs 20 and 21 are demurred to upon the 
ground that no facts are alleged in support of the gen- 


102 CASES BROUGHT IN THE COMMERCE COURT. 

eral conclusion therein pleaded. An examination 
of said paragraphs has convinced us that the de¬ 
murrer as to these paragraphs should be overruled. 

Paragraph 22 of the bill is demurred to upon the 
ground that the facts therein alleged do not support 
the allegation that the order complained of is based 
upon an erroneous theory. We think the para¬ 
graph is sufficient as against the demurrer. We do 
not now, however, decide whether it is material or not. 

Paragraph 23 is demurred to upon the ground that 
the facts therein pleaded are immaterial to any issue 
in the case. An inspection of said paragraph con¬ 
vinces us that the demurrer is well taken. 

Paragraphs 24, 25, and 26 are demurred to upon 
the ground that the facts therein alleged do not sup¬ 
port the conclusions reached. As paragraph 24 is 
clearly irrelevant and immaterial, the demurrer there¬ 
to will be sustained. It is held in Interstate Commerce 
Com7nission v. Chicago , Rock Island and Pacific Rail¬ 
way (218 U. S., 85), that railroads can complain of 
rates which affect their revenue but not as to how 
they affect shippers and places. The demurrer to 
paragraphs 25 and 26 is overruled for the reason that, 
assuming said allegations to be material, they suffi¬ 
ciently set forth facts with reference to the matters 
therein pleaded. 

Assuming but not deciding that a violation of the 
fifth amendment to the Constitution of the United 
States may be based upon an order which estab¬ 
lishes a rate on a single article or commodity, we 
proceed to examine the allegations of the bill upon 


CASES BROUGHT IN THE COMMERCE COURT. 103 

which it is sought by the pleader to found such a 
violation. If a case of confiscation is charged at all 
in the bill, it is contained in paragraphs 12, 14, 15, 
17, and 19, which paragraphs are as follows: 

12. Complainants allege that their rates and 
charges filed with said commission and now in effect 
applying to the transportation by rail and water 
of boots and shoes in less than carload quantities 
from Boston and New York to Atlanta are just and 
reasonable charges for the service rendered within 
the meaning of the act to regulate commerce. 

14. They show that said rates and charges are not 
more than reasonably compensatory—that is to say, 
that the revenue therefrom is not more than suffi¬ 
cient to pay the actual cost of the service rendered 
in the transportation of said traffic and a reasonable 
profit. 

15. Complainants show that none of their rates or 
charges, as aforesaid, are unjust, unreasonable, un¬ 
justly discriminatory, or unduly preferential or prej¬ 
udicial, or otherwise in violation of said act, within 
the meaning of section 15 of said act. 

17. Complainants show that the rates sought to be 
established by said order are not just and reasonable 
rates or charges for the transportation of the prop¬ 
erty aforesaid, but, on the contraiy, are unjust and 
unreasonably low rates or charges; and complain¬ 
ants allege that the establishment of such rates is in 
excess of the power and authority of the said de¬ 
fendant commission under the said act to regulate 
commerce, more particularly section 15 thereof, and 
that said order is in violation of said act and in con¬ 
travention of the Constitution of the United States, 
more particularly the fifth amendment thereof, the 


104 CASES BROUGHT IN THE COMMERCE COURT. 

benefit and protection of which said act and said 
amendment the complainants specially claim. 

19. Complainants show that the rates ordered to be 
established are less than reasonably compensatory, 
affording them revenue not sufficient to pay the actual 
cost of service rendered in the transportation of said 
traffic and a reasonable profit, thereby violating said 
act and said amendment to the Constitution of the 
United States, the benefit and protection of which said 
act and said amendment the complainants specially 
claim. 

Paragraph 12, above quoted, is demurred to upon 
the ground that the bill states no facts upon which to 
found a general allegation that the rates in effect prior 
to the making of the order complained of were just 
and reasonable charges for the service rendered and 
that said paragraph states a mere conclusion without 
supporting it with allegations of issuable facts. 

Paragraph 14 is demurred to upon the ground that 
the complainants fail to allege the actual cost of the 
service rendered in the transportation of the traffic 
affected, or to show the revenue actually derived from 
such traffic, and also fails to show the amount of the 
profit derived by the complainants, respectively, from 
such traffic, or what constitutes a reasonable profit for 
the service performed. 

Paragraph 15 is demurred to upon the ground that 
no facts are stated upon which to found the conclusion 
pleaded that none of the rates or charges upon the 
traffic affected are unjust, unreasonable, unjustly dis¬ 
criminatory, or unduly preferential or prejudicial. 


CASES BROUGHT IN THE COMMERCE COURT. 105 

Paragraph 17 is demurred to upon the ground that 
no facts are pleaded tending to show that the commis¬ 
sion in making the order complained of exceeded its 
power and authority. 

Paragraph 19 is demurred to upon the ground that 
the bill fails to show the cost of the service rendered 
and the revenue derived therefrom, together with the 
profit earned thereon, and hence fails to show beyond 
a doubt that the enforcement of the order complained 
of will necessarily amount to the taking of petitioners' 
property without compensation and without due 
process of law. 

We think the demurrer in some of its specifications 
as to the paragraphs mentioned must be sustained. 
In determining this question we must remember that 
the petitioners are asking this court to enjoin and sus¬ 
pend an order of the Commission fixing rates for the 
future, in the making of which the commission exer¬ 
cises a legislative function. The importance of the 
judgment we are asked to render in the matter must 
not be overlooked. Before we may annul the order we 
must be clearly satisfied it is our duty to do so. In 
view of the character of the order and the importance 
of our action in reference thereto, we believe that this 
court is entitled to, and must require of the petition¬ 
ers a full and fair statement of all the facts upon which 
they rely for relief. It is only in rare instances 
that conclusions of fact or law may be rightly 
pleaded. The court ought to be permitted so far as 
possible to draw its own conclusions from the facts 


106 CASES BROUGHT IN THE COMMERCE COURT. 

stated by the pleader. In the present case we think 
the pleader should inform the court as to what is 
meant by the words “ reasonably compensatory.” 
What may be “reasonably compensatory” in the 
opinion of the pleader may not be so in the opinion of 
the court. Likewise, we think the court should be 
informed as to what the pleader means by the words 
“reasonable profit.” Perhaps if the pleader should 
state what he would regard as a “reasonable profit” 
the bill would be bad on its face. Again, it is alleged 
that the revenue derived from the transportation of 
boots and shoes from Boston and New York to At¬ 
lanta under the old rate was not more than sufficient 
to pay the actual cost of the service rendered and a 
reasonable profit. We think we are entitled to some 
showing as to what the revenue derived from the 
traffic is, and, if possible, the cost of service. If the 
cost of transporting a single commodity can not be 
shown, and it seems to be conceded that it is rarely 
possible to do so, then such other facts in lieu thereof 
as may make out a violation of the fifth amendment 
to the Constitution should be stated. We do not say 
that in cases where cost of service can not be shown 
a violation of the fifth amendment may not be made 
out in other ways, but when petitioners undertake 
to plead the items of revenue, cost of service, and 
profit, we are entitled to more information concerning 
them than is contained in the bill in this case. What¬ 
ever information exists bearing upon the contentions 
of petitioners is largely in their possession, and in 
cases of this kind no material information should be 


CASES BROUGHT IN THE COMMERCE COURT. 107 

withheld, consistent with the rules of good pleading. 
We are sustained in these views by the decisions 
in L. & N. Ry. Co. v. Siler (186 Fed., 190), and 
Southern Pacific Co. v. Campbell (189 Fed., 182). 

We now come to consider the second general 
ground of attack .upon the order of the commission, 
namely, the exercise of power in such an unreason¬ 
able manner as to render the order void. 

Paragraph 27 is demurred to upon the ground that 
none of the facts therein alleged tend to support the 
conclusions pleaded. Said paragraph alleges that 
the Commission took into consideration in making its 
order certain factors which it is alleged could have 
no influence with the commission in reaching a proper 
decision. While we do not wish to be understood 
as now deciding that the facts set forth in para¬ 
graph 27 would render the order complained of 
void, they are of such persuasive force if true as to 
cause us at this time to overrule the demurrer as to 
this paragraph. 

Paragraphs .28 and 29 are mere arguments, and as 
to them the demurrer is sustained. 

Paragraphs 30, 31, 32, and 33 are demurred to upon 
the ground that the Commission being an expert tri¬ 
bunal, appointed by law and informed by expe¬ 
rience, is not limited in its consideration of questions 
presented to the evidence formally offered and intro¬ 
duced by the parties, but in the exercise of its ad¬ 
ministrative function it may and should have re¬ 
course to all sources of pertinent information and 
should apply its expert knowledge and accumulated 


108 CASES BROUGHT IN THE COMMERCE COURT. 

experience to the determination of the question 
whether particular rates are or are not just and 
reasonable. 

The paragraphs last above mentioned are as follows: 

30. Complainants show that the said defendant 
commission exceeded the authority delegated to it 
by the said act and erred as a matter of law in the 
following particular also: They allege that no 
evidence was introduced before said defendant com¬ 
mission tending to show that a rate of 95 cents per 
hundred pounds from Boston and New York to 
Atlanta for the carriage of the traffic involved in 
the proceeding before said commission was, is, or 
would be a fair, just, reasonable or nondiscriminatory 
rate, or a rate fairly compensatory for the service 
rendered; and complainants show that the ascertain¬ 
ment of such rate was based not upon any competent 
evidence nor upon any evidence, but was the result 
of mere conjecture, and that said order, based on con¬ 
jecture, as aforesaid, is in excess of the authority of 
said commission and will, if enforced, violate the 
rights of said complainants under the said act to 
regulate commerce. 

31. Complainants allege that the said finding and 
said order of said commission is unauthorized and 
erroneous in the following respect: In that it appears 
from the report of the commission which accompa¬ 
nied the said order that the commission in arriving 
at its conclusion misapprehended the evidence which 
was introduced in the said proceeding. The commis¬ 
sion was apparently controlled by its belief that 
complainants and other carriers had voluntarily 
established and applied for a long period a rate of 85 
cents on boots and shoes in less than carloads, whereas 


CASES BROUGHT IN THE COMMERCE COURT. 109 

complainants aver that said rate of 85 cents was never 
voluntarily established; that independent of the 
action of a court which compelled its application, it 
was never in force except for a few days, and that its 
enforcement for a long period was required by a judi¬ 
cial decree which restrained the complainants from 
charging any higher rate. 

32. The complainants further show unto your 
honors that the rates now in effect are just and reason¬ 
able rates in themselves. They show that at the 
hearing before the defendant no evidence was offered, 
heard, or introduced tending to show that said rates 
were unreasonable, unjust, or unlawful in and of them¬ 
selves; that there was no such evidence of the cost of 
the actual service for which such rates were charged, 
the value of such service, or as to the various elements 
which 'are properly to be considered in determining 
whether or not a given rate is reasonable in and of 
itself. Your complainants therefore show that the 
said order is not based upon evidence tending to show 
the unreasonableness of the rates in effect, and that 
in such respects the order is unjust, unreasonable, un¬ 
lawful, in excess of the authority of said defendant 
under said act to regulate commerce, and in violation 
of the Constitution of the United States, more par¬ 
ticularly the fifth amendment thereto. 

33. Complainants show that said order is not based 
on any finding or conclusion of said defendant that 
said rates are unjust or unreasonable in themselves 
for the service involved in said transaction, and com¬ 
plainants show that in this respect said order exceeded 
the authority of said defendant and is in violation of 
said amendment to the Constitution of the United 
States. 


110 CASES BROUGHT IN THE COMMERCE COURT. 

It will be observed that the allegations of the bill 
are to the effect that there was no evidence offered, 
heard, or introduced tending to show the existing 
rates to be unjust, unreasonable, or unlawful in and 
of themselves, or that a rate of 95 cents per hundred 
pounds from Boston and New York to Atlanta for 
the carriage of the traffic involved would be a fair, 
just, and reasonable rate. If the contention raised by 
the demurrer goes so far as to say that the Commis¬ 
sion may rely wholly upon their expert knowledge 
and accumulated experience to condemn an existing 
rate and establish a new rate for the future in its 
place, we must hold that the demurrer should be 
overruled. The Commission, in the investigation of 
any question, may bring to its solution the accumu¬ 
lated experience and expert knowledge of its mem¬ 
bers, and it would be its duty to do so, but before 
an existing rate may be condemned there must be a 
finding of some sort that it is unjust and unreasonable 
(.Interstate Commerce Commission v. Stickney, 215 
U. S., 105), and this finding must be based upon 
evidence of which the carrier is apprised so that 
it may meet the case brought against it if it so 
desires. Further, if it shall be claimed in support of 
the demurrer that the Commission may condemn 
an existing rate whenever it is of opinion that 
it is unjust and unreasonable, and that this opinion 
may be based merely upon the expert knowledge 
and accumulated experience of its members, then, 
indeed, is a carrier not only deprived of the equal 
protection of the law but of the protection of 


CASES BROUGHT IN THE COMMERCE COURT. HI 

all law. Certainly the carrier is entitled to some 
proceeding which may in truth be called due process 
of law before its property rights may be invaded. 
The importance of the question raised requires an 
examination of the statute under which the Com¬ 
mission acts when it decides to establish a rate for 
the future. Section 15 of the act to regulate com¬ 
merce, as it stood when the order in this case was 
made, provided as follows: 

“ * * * That the commission is authorized and 
empowered and it shall be its duty whenever after 
full hearing upon a complaint made as provided in 
section 13 of this act * * * it shall be of the 
opinion that any rates or charges whatsoever de¬ 
manded, charged, or collected by any common car¬ 
rier or carriers subject to the provisions of this act 
for the transportation of persons or property as de¬ 
fined in the first section of this act * * * are 
unjust or unreasonable, or unduly discriminatory, or 
unduly preferential or prejudicial, or otherwise in vio¬ 
lation of the provisions of this act, to determine and 
prescribe what will be the just and reasonable rate or 
rates, charge or charges to be thereafter observed in 
such case as the maximum to be charged.” 

By the plain language of the law the power of the 
Commission to prescribe a rate for the future can 
not be exercised unless after full hearing on com¬ 
plaint made it shall be of the opinion that any of 
the rates or charges whatsoever demanded, charged, 
or collected by any common carrier or carriers sub¬ 
ject to the provisions of the act, for the transpor¬ 
tation of persons or property as defined in the first 


112 OASES BROUGHT IN THE COMMERCE COURT. 

section of the act, are unjust or unreasonable, or 
unjustly discriminatory, or unduly preferential or 
prejudicial, or otherwise in violation of the provisions 
of the act. The word “ opinion” must be interpreted 
with reference to the connection in which it is used in 
the law. It is only after full hearing upon complaint 
made that the law gives any weight or significance 
to the opinion of the commission; that is, it is only 
when the opinion results from the full hearing that 
it can be used as the basis of further action by the 
commission. It is true that in making up the opinion 
of the commission its members may and it is their 
duty to call to their aid their knowledge and experi¬ 
ence, but if Congress had intended that the commis¬ 
sion could make up its opinion from the knowledge 
and experience of its members independent of any evi¬ 
dence in the particular case, then it was idle to pro¬ 
vide for a full hearing, as an opinion of the commission 
could be formed as well without as with the full 
hearing. A full hearing not only means an oppor¬ 
tunity to be heard by the carrier, but an investigation 
by the commission itself of the lawfulness of the rate 
in question. 

It is distinctly alleged in the language above quoted 
from the bill, which is admitted by the demurrer, 
that at the hearing which resulted in the making of 
the order complained of in this case no evidence was 
offered, heard, or introduced tending to show that 
the existing rates were unreasonable or unjust, but 
that said order was the result of mere conjecture and 
speculation. The allegation that there was no such 


CASES BROUGHT IN THE COMMERCE COURT. 113 

evidence offered, heard, or introduced is an allegation 
of fact so far as the question of pleading is concerned, 
but whether or not there is at the close of a final trial 
any evidence to sustain a finding of fact made by a 
judicial or quasi judicial tribunal is always a question 
of law, which in a case like the one at bar, this court 
has jurisdiction to determine. (Ward v. Joslin, 186 
U. S., 142, 147; United States Fidelity & G. Co. v. 
Board of CommWs , 145 Fed., 144, 151, 76 C. C. A., 
114, 121; Laing v.Rigney, 160 U. S., 531, 540; South¬ 
ern Pacific Co. v. Pool , 160 U. S., 438, 440; The 
Francis Wright , 105 U. S., 381, 387; Clement v. Ins. 
Co., 7 Blatchf., 51, 53, 54, 58, Fed. Cases No. 2, 
882; Fisher v. Scharadin, 186 Pa., 565-569; Dela¬ 
ware, L. & W. R. Co. v. Converse, 139 U. S., 469, 
472; Howe et al. v. Parker et al., C. C. A. Eighth 
Circuit, opinion filed October 12, 1911.) 

The demurrer therefore, so far as it is general, will 
be overruled. So far as it is special it will be overruled 
as to paragraphs numbered 10, 11, 20, 21, 22, 25, 26, 
27, SO, 31, 32, and 33, and sustained as to paragraphs 
numbered 12, 13, 14, 15, 16, 17, 18, 19, 23, 24, 38, 
and 29. 

It results that the motion to dismiss will also be denied. 

Leave to amend petition within 30 days is granted . 
The United States is granted permission to answer the 
original petition within 10 days, and to plead to the 
amended petition if one is filed within 10 days from the 
date of the service of a copy thereof. 

48250—S. Doc. 789, 62-2-8 









































United States Commerce Court. 


No. 4.— April Session, 1911. 


Louisville & Nashville Railroad 
v. 

Interstate Commerce Commission, respondent. 
United States, intervening respondent. 


ON final hearing on bill, answer, and proofs. 

For opinion of Interstate Commerce Commission 
see 17 Inter. Com. Com. Rep., 231. 

For opinion of Circuit Court, refusing preliminary 
injunction, see 184 Fed., 118. 

Mr. Helm Bruce and Mr. W. G. Dearing for peti¬ 
tioners. 

Mr. W. E. Lamb for Interstate Commerce Com¬ 
mission. 

Mr. J. A. Fowler , Assistant to the Attorney General, 
and Mr. Blackburn Esterline , special assistant to the 
Attorney General, for the United States. 

Mr. Alfred P. Thom and Mr. Walker D. Hines for 
Southern Railway. 

Mr. Edward Barton for Baltimore & Ohio South¬ 
western Railroad. 

115 





116 CASES BROUGHT IN THE COMMERCE COURT. 

Before Knapp, Presiding Judge, and Archbald, 
Hunt, Garland, and Mack, Judges. 

[Feb. 28, 1912.] 

Archbald, Judge : 

A brief history of this case will aid in understand¬ 
ing the questions to be decided. For a number of 
years prior to 1907 the through rates on certain 
classes of freight over the Louisville & Nashville Rail¬ 
road, the present petitioner, from New Orleans, La., 
to Montgomery, Selma, and Prattville, Ala., were 
higher than the rates on the same classes from New 
Orleans to Mobile, an intermediate point, plus the 
rates from Mobile to Montgomery and the other places 
mentioned. The through rates from New Orleans to 
these places were also similarly higher than the rates 
to Pensacola plus the rates from there to the same 
destinations, the two situations in this respect being 
identical. 

This somewhat peculiar condition was brought 
about, as it is alleged, by the fact that the rates from 
New Orleans to Mobile and Pensacola were made 
lower than might justly have been charged, as well as 
lower than the general basis of rates prevailing in 
that section of the country, because of the neces¬ 
sity for meeting water competition between these 
places; from which policy it resulted, as is to be 
gathered from the record, that the rail line of the 
petitioner greatly increased its tonnage, and eventu¬ 
ally secured the bulk of the traffic, the rail rates being 
continued for a number of years after the water com¬ 
petition had practically been eliminated. 


CASES BROUGHT IN THE COMMERCE COURT. 117 

Following, however, the enactment of the Hep¬ 
burn law in 1906, the Interstate Commerce Commis¬ 
sion, in an administrative ruling, which has several 
times been re-affirmed, announced that through rates 
in excess of the combination of intermediate rates 
would be regarded as prima facie unreasonable, and 
that the burden would be on the carrier to defend 
them. Subsequently to this, and possibly prompted 
by it, in June, 1907, the Montgomery freight bureau, 
on behalf of the commercial interests of that city, 
filed with the Commission a formal complaint against 
the railroad, alleging that the higher through rates 
to Montgomery than the combination on Mobile, on 
certain classes and commodities, subjected Mont¬ 
gomery to undue prejudice and disadvantage, in favor 
of Mobile, in violation of section 3 of the interstate 
commerce act. Influenced by this, no doubt, and 
by the ruling of the Commission referred to, the rail¬ 
road, on August 13, 1907, advanced its rates from 
New Orleans to Mobile and Pensacola on certain 
classes of freight, by varying amounts sufficient in 
each case to make the new combination on Mobile and 
Pensacola correspond with the through rate to Mont¬ 
gomery. This action of the railroad, coupled with 
subsequent reductions on a number of articles, by 
taking them out of their respective classes and giv¬ 
ing them special commodity rates, apparently had 
the effect of satisfying the commercial interests of 
Montgomery, and nothing further seems to have been 
done in consequence upon the complaint filed by 
the freight bureau of that city. 


118 CASES BROUGHT IN THE COMMERCE COURT. 

This did not, however, satisfy all parties. For a 
number of years the rates out of New Orleans had 
been the subject of agitation by the New Orleans 
Board of Trade, and at various dates, in October and 
November, 1907, complaints were accordingly filed 
with the Commission by that body, severally charging 
that the rates to Mobile and Pensacola as recently 
advanced by the railroad, and the through rates to 
Montgomery and the points grouped with or based 
thereon, were unjust and unreasonable in them¬ 
selves as well as in comparison with the rates from 
Memphis, St. Louis, and Louisville. A restoration 
of the rates in effect to Mobile and Pensacola prior 
to August 13, 1907, was thereupon prayed, and a 
reduction of the rates to Montgomery, so that they 
would not exceed a combination of the locals by way 
of these places as thus established. The adjust¬ 
ment of certain commodity rates relatively to St. 
Louis and Memphis was also asked for. 

The railroad duly answered these complaints, deny¬ 
ing that the rates in force were unjust or unreasonable, 
and setting forth in detail the facts and circumstances 
relied on to justify them. But after answering and 
before any hearing by the Commission had been 
entered upon, the railroad voluntarily established 
special commodity rates on a number of articles 
which had been complained of, thereby making the 
rates on all articles, or at least on most articles, from 
New Orleans to Montgomery points, as well as to 
Mobile and Pensacola, the same as or lower than 
the rates from Memphis and the other places named 


CASES BROUGHT IN THE COMMERCE COURT. 119 

to these destinations. This was the undoubted in¬ 
tention of petitioner and appears to have been gen¬ 
erally if not completely carried into effect. 

The three New Orleans cases were heard by the 
Commission together and were disposed of Novem¬ 
ber 26, 1909, in a single report and order. This 
order, in substance, condemned the advance in rates 
to Mobile and Pensacola on the classes involved as 
unjust and unreasonable; directed the restoration of 
the rates in force prior to August 13, 1907, to these 
places; declared the through rates to Montgomery, 
Selma, and Prattville, to the extent that they ex¬ 
ceeded the sum of the locals by way of Mobile and 
Pensacola prior to that date, to be also unjust and 
unreasonable; and prescribed for the future certain 
maximum rates to be maintained by the railroad for 
the statutory two-year period. The rates which 
were so prescribed to Mobile and Pensacola were the 
same in each case as the rates which had existed prior 
to the advance made by the company, and the rates 
to Montgomery were exactly equal to the rates to 
Pensacola and Mobile as so restored, plus the rates 
from these places to Montgomery, which remained 
unchanged; the rates to Selma being made up in the 
same way, and those to Prattville having the prevail¬ 
ing arbitrary added. 

This order, by its terms, was to go into effect 
February 1, 1910, but was postponed by supple¬ 
mental orders until April 15, following; prior to 
which time a bill in equity was filed by the railroad 
against the Commission in the Circuit Court of the 


120 CASES BROUGHT IN THE COMMERCE COURT. 

United States for the Western District of Kentucky, 
and an application made for a preliminary injunction. 
This application was heard by three circuit judges 
on bill and affidavits, and was denied by the court 
in an opinion by Judge Severens (184 Fed., 118); 
after which the order of the Commission became 
effective and has since been complied with. 

The Commission having answered the bill, an ex¬ 
aminer was appointed and a large amount of testi¬ 
mony taken on behalf of the petitioner, the entire 
proceedings before the Commission, including the 
testimony submitted to it, being also under objec¬ 
tion made a part of the record. No proof was 
offered in opposition to this in support of the order, 
the Commission taking the position that having been 
made after a full hearing, upon due consideration of 
the issues involved and in the exercise of the au¬ 
thority conferred by the statute, the order was not 
open to question. Upon the organization of the 
Commerce Court the case was transferred here, and 
now comes up for disposition upon final hearing. It 
has been ably and elaborately argued in all its dif¬ 
ferent phases, but there is only one that it seems 
necessary to pass upon, and that is, whether the Com¬ 
mission, in the order which it has made, has not in a 
legal sense acted as charged in such an unreasonable 
manner that its order is invalid, having nothing 
of substance or persuasive force upon which it can 
rightly be predicated. This is claimed to result be¬ 
cause the reasons assigned in the report either do 
not justify the conclusion reached or are so at vari- 


CASES BROUGHT IN THE COMMERCE COURT. 121 

ance with the undisputed facts that effect has plainly 
not been given by the Commission to the evidence 
which was produced before it; and therefore, as it is put 
in the petition—repeated frequently in various connec¬ 
tions—the “ order is unreasonable, unjust, unlawful, 
arbitrary, and oppressive and in excess of the author¬ 
ity granted and powers conferred upon” the Com¬ 
mission by the amended act to regulate commerce. 
Stated in another form the question is whether this 
order, tested by the principles recently emphasized 
by the Supreme Court in Interstate Com. Com. v. 
Union Pacific R. R., decided January 9, 1912, should 
not be set aside because there was no substantial 
evidence to sustain it. That is to say, whether the 
Commission, while in form acting within the authority 
conferred by the statute, has not in effect disregarded 
it. And it is to this question that we therefore 
address ourselves. 

In this connection we take occasion to say that 
if the conditions dealt with in the report of the 
Commission were substantially as they are there 
described, we should have little hesitation in dis¬ 
missing the petition. For even though in that case 
it might seem doubtful to us whether the Commission 
had reached a just conclusion, it would nevertheless 
appear that there was room for differences of opinion, 
because different inferences were able to be drawn, and 
in such case the conclusions of the Commission should 
be accepted as to matters thus clearly within its juris¬ 
diction. But the question here is whether the report 
can fairly be regarded as of that character. On the 


122 CASES BROUGHT IN THE COMMERCE COURT. 

taking of testimony in the circuit court after the 
preliminary injunction had been refused, the entire 
evidence before the Commission was introduced 
into the record, and it is to that evidence that 
reference is made in this opinion unless otherwise 
stated. That evidence we have read and re-read with 
the utmost care, and it is because of our inability to 
understand how, on the facts which there appear, the 
report before us could have been made, that the 
difficulty under which we labor arises. 

By the express provisions of the statute (sec. 15) 
before going on to prescribe future rates the Com¬ 
mission must reach the conclusion that the 
existing rates established by the carrier are un¬ 
just and unreasonable. It is the duty and the 
privilege of the carrier in the first instance to fix 
the rates to be charged (Inter. Com. Com. v. Chicago 
Great Western Railroad , 209 U. S., 108, 119), and it 
is only where after due notice and a full hearing— 
whether on complaint of a shipper or upon investiga¬ 
tion by the Commission of its own motion—it is 
made to appear that the rate is unjust and unrea¬ 
sonable, that the Commission is empowered to fix 
another. The hearing which is so provided for is 
not a perfunctory one. The carrier is entitled 
to know and to rely on what is adduced at it, 
either for or against the existing rate, and the Com¬ 
mission is not authorized to disregard it and reach a 
conclusion not at all justified by it. If the rate at¬ 
tacked is shown to be unjust, it may be abrogated and 
a new one established. But if that is not the outcome 


CASES BROUGHT IN THE COMMERCE COURT. 123 

of the hearing and on the contrary it is clearly shown 
that the rate is not unjust, the evidence as to this 
can not be put aside, and if it is, and the Commis¬ 
sion without reference to it proceeds to condemn the 
rate and to fix another, its action is invalid. 

After the most careful consideration we are forced 
to conclude that the action of the Commission in the 
present instance is of that character. Having regard 
to the evidence, the only tangible ground upon which 
it will be found to rest is the fact that there had been 
an advance in the rates to Pensacola and Mobile, and 
that the Montgomery rate exceeded the sum of the 
rates through these points as they stood prior to this 
increase, making the increase in these intermediate 
rates the only proof of unreasonableness, not only as 
to Pensacola and Mobile, but Montgomery also. It 
is conceded by counsel for the Government that if this 
were true as to the rates to Montgomery, the order of 
the Commission would be invalid, because it would 
not be based on the reasonableness or unreasonable¬ 
ness of these rates independently considered. And 
it is just as clear that if the reduction to Mobile and 
Pensacola was a mere restoration of the rates pre¬ 
viously in force, based solely on the advance made by 
the railroad, it is equally indefensible. And, taking 
the case as it stands, there is practically nothing else, 
as it seems to us, that can be made out of it. Not 
but that other reasons are given by the Commission. 
But it will be found upon examination, as stated 
above, either that they are entirely unsupported by 


124 CASES BROUGHT IN THE COMMERCE COURT. 

the evidence or are involved in such capital mistakes 
with respect to it, or are in themselves so inconse¬ 
quential as to the reasonableness or unreasonableness 
of these rates, that nothing can be consistently predi¬ 
cated upon them. And this we will now endeavor 
to demonstrate. 

The New Orleans-Montgomery rate, which has 
been set aside by the order of the Commission, was 
one of very long standing and was established with 
great circumspection. In 1886 Hon. Thomas M. 
Cooley, whose attainments are too well known to 
dilate upon, the first chairman of the Interstate Com¬ 
merce Commission, was called upon by the railroads 
running into what was designated as the southeastern 
territory to arbitrate and adjust the relative rates 
from crossing points on the Ohio and Mississippi 
Rivers to certain places such as Montgomery and 
others within the section of country roughly described 
as lying between the Memphis & Charleston Railroad 
on the north, the Gulf of Mexico on the south, the 
Chattahoochee River on the east, and the Mobile & 
Ohio Railroad on the west. He was not to determine 
specific rates, but their relation to each other. This 
question had first been submitted to Mr. James R. 
Ogden, as commissioner of certain associated rail¬ 
roads running into this territory, and after he had 
passed upon it it was submitted to Judge Cooley, who 
virtually affirmed Mr. Ogden’s rulings. So far as the 
present comparison is concerned it is sufficient to note 
that it was thereby decided that the rates from Louis¬ 
ville, Evansville, Cairo, and other like points on the 


CASES BROUGHT IN THE COMMERCE COURT. 125 

Ohio River, to Birmingham, Montgomery, Selma, and 
other points within the defined territory should be the 
same; that the rates from East Cairo, Columbus, Hick¬ 
man, and points on the Mississippi in Kentucky should 
be two cents less; and that the rates from Memphis, 
Vicksburg, and New Orleans should be four cents less. 
An adjustment of rates was made by the railroads in 
accordance with this, including those from New 
Orleans to Montgomery and other points in that 
section, and these rates were maintained, at least so 
far as class rates are concerned, until the building 
of the Kansas City, Memphis & Birmingham Rail¬ 
road from Memphis to Birmingham, which made a 
very much shorter line than had previously existed 
between these cities, when the rates on the first 
six classes of freight from Memphis to Birmingham 
were greatly reduced below what they had been, and 
those from New Orleans to Birmingham were also 
reduced to correspond relatively, in accordance with 
Judge Cooley’s adjustment. The reduction from 
New Orleans to Birmingham, however, proved too 
great and could not be maintained, and the rates 
between these places were at first restored to the 
original figures, and then reduced to an intermediate 
position; and this brought about a reduction on rates 
for these classes.between New Orleans and Montgomery, 
Montgomery being intermediate to Birmingham. 
The final adjustment of these rates was reached in 
1896, and as fixed at that time they remained sub¬ 
stantially unchanged until 1910, a period of 14 years, 
when the Commission made the order in question. 


126 CASES BROUGHT IN THE COMMERCE COURT. 

The original careful determination of the New 
Orleans-Montgomery rates, in their relation to those 
from Ohio and Mississippi River points into the 
same territory, in accordance with the Cooley arbi¬ 
tration; the subsequent readjustment of them upon 
the building of the Memphis and Birmingham short 
line; and their long continued acceptance by the busi¬ 
ness public, during which time freight moved freely 
under them; all strengthen the presumption in favor of 
the reasonableness of these rates; against which there 
is practically nothing to militate except the previous 
competitive water rates from New Orleans to Mobile 
and Pensacola, and the combination to be made on 
them to Montgomery. The conclusion is thus forced 
and indeed is patent on the face of things that the 
Montgomery through rates as now fixed by the 
Commission are nothing more than the restored 
competitive Mobile and Pensacola rates plus the 
previous rates from those places to Montgomery. 

There is no change, as it will be noted, in the rates 
from Mobile and Pensacola to Montgomery. The 
change in the Montgomery through rate is effected by 
reducing the rates from New Orleans to the inter¬ 
mediate points named and combining them with the 
rates from there to Montgomery, the reduction in the 
New Orleans-Montgomery through rates being 
exactly the same as the reduction made in the rates 
to Pensacola and Mobile as to every class except 
one—class E—where the through rate is reduced 
1 cent, as against a 5 cent reduction to Mobile, 
and none at all to Pensacola. This coincidence is 


CASES BROUGHT IN THE COMMERCE COURT. 127 

too significant to be a mere accident, or to fail to 
reveal the consideration which influenced it. It 
extends to the through rates to Selma and Pratt¬ 
ville, as well as to Montgomery, not only by way 
of Mobile but of Pensacola also, an exactitude which 
it is impossible to account for except upcjn the ground 
which has been suggested. Not only is the reason¬ 
ableness or unreasonableness of the through rates to 
Montgomery, as fixed by the Commission, thus made 
to depend on the reasonableness or unreasonableness 
of the Mobile-Pensacola part of them, but they are all 
obliged to stand or fall on the fact of this coincidence, 
by which, as conceded by counsel, they are not able to 
be defended. It is true, as already stated, that there 
are other reasons assigned by the Commission in its 
report for the reduction in the New Orleans-Mont- 
gomery rates, but, with due respect to the Commis¬ 
sion, they do not bear up under examination. 

The relation of rates established by the Cooley 
arbitration and the disturbance inevitably to re¬ 
sult from a disregard of it was pressed upon the 
Commission as strong grounds against the proposed 
changes. “ The Cooley arbitration of 1886,” it is said 
in the report, “ has been strongly urged * * * as a 
reason for the non-reduction of the present advanced 
rates. This arbitration established a relation of 
rates as between the several Ohio and Mississippi 
River crossings, applying upon products from the 
territory north and west of those rivers destined to 
southern and southeastern territory, by fixing a basis 
for making rates from these several basing points to 


128 CASES BROUGHT IN THE COMMERCE COURT. 

the southeastern territory, with the object of main¬ 
taining an equitable relation and equality of the 
basing rate as between said points on goods trans¬ 
ported to southeastern territory, but we do not 
understand that this arbitration undertook to fix 
the actual rates for carriage from the several basing 
points to destinations in this territory. However, 
if such were the case, the building of new railroads, 
competition, and other causes forced many depar¬ 
tures from the adjustment and the rates made under 
it, until it has become materially altered, and it is 
inevitable and proper that it should yield to meet 
new and changed conditions.” 

From this, which is all the Commission has to say 
on the subject, it would be supposed that the Cooley 
award was only a basis of adjustment accepted many 
years before, but which had come to have little more 
than historical value. In other words, that it was 
merely a starting point from which departures were 
frequently and freely made. If this were so, the 
Commission might properly regard it as of no great 
importance and certainly as furnishing no substantial 
obstacle to further modification by the reduction of 
rates from New Orleans. But the record before the 
Commission, as we read it, does not warrant the 
inference apparently intended from the statement 
above quoted. Taken by itself the statement is not 
literally inaccurate, since it seems that some changes 
were made at various times in the rates on particular 
articles by taking them out of their respective classes 
and giving them special commodity rates, and to such 


CASES BROUGHT IN THE COMMERCE COURT. 129 

extent as changes of this character were made they 
may be regarded in a sense as departures from the 
Cooley arbitration basis. Moreover, the fact that 
the complaint of the New Orleans Board of Trade 
embraced in terms commodity rates as well as class 
rates, and that there was more or less testimony at 
the* hearing which must have related to commodity 
rates, doubtless accounts for what the Commission 
says upon this subject. But when it is remembered 
that no change of consequence in class-rate relations 
had taken place since the original adjustment, except 
the one heretofore explained, and that the order in 
question pertains only to class rates from New Orleans 
the matter presents itself in a very different aspect. 
Surely the long continuance of these class rates, which 
are the basis of the rate structure in that territory, 
and which must be assumed to have been equitably 
adjusted as between the various competing towns 
on the Ohio and Mississippi Rivers by the Cooley 
award, was a valid and persuasive objection to any 
order which would have a disturbing effect upon 
the class-rate situation. Nor was the force of this 
objection appreciably lessened by the circumstance 
that some articles were taken out of the classes from 
time to time and given commodity rates. Particu¬ 
larly is this so in view of the fact that the Commis¬ 
sion's report contains no intimation that class rates 
from other points should be reduced, clearly indi¬ 
cating that the order in question was not predi¬ 
cated upon any finding or contention that this class- 
rate adjustment was unfair to New Orleans. When 

48250—S. Doc. 789, 62-2-9 


130 CASES BROUGHT IN THE COMMERCE COURT. 

therefore the facts in this regard are fully perceived 
their important bearing upon the controversy seems 
evident, and they are not to be dismissed from con¬ 
sideration, as they appear to be by the Commission, 
on the mistaken view that “the building of railroads, 
competition, and other causes had forced departures 
from the adjustment of rates under it until it had 
become materially altered, as was inevitable and 
proper to meet changed conditions;” as suggested. 

As a further reason for making the order in ques¬ 
tion the report of the Commission contains the follow¬ 
ing: “It was stated by the principal witness for the 
defendant that between points on its line where the 
through rate exceeded the combination of rates from 
point of origin to a competitive point and from said 
competitive point to destination, shippers were 
given the benefit of the combination rate, and this 
provision appeared in special circulars and was very 
generally observed as a rule for the adjustment of 
freight rates; and such having been formerly the 
custom of the defendant, it would seem now to work 
no especial hardship upon it to reduce rates to the 
basis of the former combination.” 

The reference here is to the testimony of Mr. C. B. 
Compton, the traffic manager of the Louisville & 
Nashville Railroad, who has been with that road in 
continuous service in various capacities for some 40 
years. But a careful reading of his testimony dis¬ 
closes no basis for the statement quoted, if it was 
meant thereby to imply that the Mobile combination 
was at any time allowed on through shipments to 


CASES BROUGHT IN THE COMMERCE COURT: 131 

Montgomery. On the contrary, it clearly appeared 
that such shipments had always paid the Montgomery 
rate, and that the Mobile combination could be 
secured only by shipping first to Mobile and then 
reshipping to Montgomery, as seems to have been 
done in a few instances. Indeed, this is recognized 
as the fact by the Commission, since it is stated in an 
earlier part of the report that ''prior to August 13, 
1907, shippers, in order to get the benefit of the lower 
combination, sometimes shipped locally to Mobile and 
then reshipped to Montgomery, Selma, and Pratt¬ 
ville.” Of course, if the fact had been otherwise, and 
the road had ordinarily or frequently carried Mont¬ 
gomery traffic on the Mobile combination, the com¬ 
mission might well say that it would be no great 
hardship to require the carrier to publish in its tariff 
the actual rates which it habitually accepted; but 
the undisputed evidence shows that the full Mont¬ 
gomery rate was constantly applied to Montgomery 
shipments, and we fail to see how that circumstance 
tended to show that the Montgomery rate was 
unreasonable. 

It is undoubtedly true, as testified by Mr. Compton, 
that it was a more or less general practice to protect 
through shipments against the combination of locals, 
and a rule to that effect was carried by his road in 
certain of its local tariffs; but there was no such rule 
in the tariffs naming rates to Montgomery territory, 
and nothing whatever appeared at the hearing to in¬ 
dicate that through traffic to Montgomery was ever 
carried at less than the Montgomery rate. A colloquy 


132 CASES BROUGHT IN THE COMMERCE COURT. 

occurred in the course of Mr. Compton’s examination 
in which he seems to have admitted that the rule in 
the local tariffs referred to, not being limited in terms, 
might be claimed to have authorized the application 
of the Mobile combination to Montgomery shipments. 
But the point is not what those tariffs might have 
been construed to mean, but what the actual practice 
was in respect of the traffic in question. Evidently 
the road was always careful to maintain this Mont¬ 
gomery rate. Everything indicates that it consist¬ 
ently did so. And it seems plain to us that the ac¬ 
ceptance on other parts of the system of combination 
rates which were lower than through rates had no 
tendency to show that these particular rates were un¬ 
reasonable. In short, when the undisputed facts re¬ 
garding this feature of the case, as they appeared 
before the Commission, are taken into account, they 
not only do not sustain the conclusion of the Com¬ 
mission, but seem to be rather of contrary import. 

With respect to the through rates from New 
Orleans to Montgomery, as well as the southeast 
territory generally, it is further said by the Com¬ 
mission, in justification of its action, that: “It was 
shown that the merchants of New Orleans have 
heretofore made ineffectual efforts to secure better 
rates to this territory, as higher rates were in effect 
from New Orleans to this territory than existed from 
distributing centers at greater distances west and 
north of said territory, the situation being such that 
New Orleans was cut off from the trade of this sec¬ 
tion as to many products, and greatly restricted and 


CASES BROUGHT IN THE COMMERCE COURT. 133 

ourdened as to many others, on account of the high 
rates of transportation/’ 

Tested by the complaints of the New Orleans 
Board of Trade, which, as above shown, embraced 
in general terms commodity rates as well as class 
rates, this statement can not be said to be wholly 
incorrect. Prior to the adjustments already re¬ 
ferred to, and which were voluntarily made by 
the carrier, months before the order in question was 
issued, it was perhaps true that New Orleans mer¬ 
chants were at some disadvantage because the 
class rates from New Orleans on certain articles 
may have been higher than or out of line with the 
commodity rates from other points on those articles. 
But this cause of complaint, to whatever extent 
justified when the proceedings before the Commission 
were instituted, was substantially if not wholly 
removed before the hearing was concluded by the 
reductions and adjustments hereinbefore mentioned, 
which resulted in actual rates from New Orleans 
lower on most articles and not higher on any article 
than rates from Memphis and other points west and 
north of Montgomery. And this was apparently 
recognized by the Commission to be the case, since 
it made no order respecting commodity rates. But 
when the paragraph quoted is tested by the class 
rates, which are the only ones reduced by the Com¬ 
mission’s order, it is not only not supported by the 
testimony, but the contrary is shown by proof that 
is not open to question. Instead of being dis¬ 
criminated against by the class rates to Montgomery 


134 CASES BROUGHT IN THE COMMERCE COURT. 

territory, New Orleans has had an actual advantage 
over the Ohio and upper Mississippi River towns, 
an advantage over Memphis in the higher classes 
and at least equality with it in the other classes, 
and an equality with Huntington, Vicksburg, and 
the lower Mississippi points to Memphis; all of which 
is established by comparative tables which stand 
unchallenged and by the tariffs, as we are advised, 
then on file with the Commission. So far, there¬ 
fore, from sustaining the action of the Commission, 
the undisputed facts in this regard tend unmistakably 
to a contrary conclusion. 

But the Commission also mentions that the rates 
from New Orleans to Montgomery, Selma, and 
Prattville were higher on all the classes than those 
from typical points in the Southeast, where the 
distances were greater, such as Brunswick and 
Savannah, Ga., Charleston, S. C., Wilmington, N. C., 
and Nashville, Tenn.; to say nothing of Virginia and 
North Carolina points, which are referred to in 
another connection. But in this comparison the 
Commission for its initial points goes over into an 
entirely different territory. It leaves the Missis¬ 
sippi and Ohio Rivers and goes to the Atlantic 
coast, in the Carolinas and Georgia, without any 
suggestion that traffic conditions from there to 
Montgomery and Selma are at all similar to those 
from New Orleans, which is the subject of com¬ 
parison, the only basis of contrast being one of 
distance. The railroad company in its bill makes 
complaint of this and avers that the conditions 


CASES BROUGHT IN THE COMMERCE COURT. 135 

are so dissimilar as to render the comparison un¬ 
justified, and that no issue as to the reasonable¬ 
ness or unreasonableness of the rates so applied as a 
standard was made, nor any evidence introduced 
which was addressed to that inquiry. And this the 
Commission in its answer admits, conceding that 
there was no fixed relation between the rates from 
these points and those from New Orleans; which we 
understand to mean no definite or determining 
relation. 

So also with regard to the rates “ from New Orleans 
to certain stations just outside of Montgomery on the 
Mobile & Ohio Railroad,” which are said by the 
Commission to be less than the rates to Montgomery 
by the Louisville & Nashville. The bill avers that 
these were unimportant local points, which did not 
enter into competition with Montgomery; that the 
traffic to them was insignificant; that no testimony 
was taken concerning them; and that the Louisville 
& Nashville Railroad does not publish or participate 
in or have anything to do with them. And the 
Commission, answering this, admits that the reason¬ 
ableness of the rates to these local points was not in 
issue, and that no attempt was made to determine 
whether or not they were reasonable, and that it did 
not undertake to determine the reasonableness of the 
rates prescribed in the order complained of on the 
basis of the rates referred to. But if all this be so, it 
is difficult to see why there was any reference made 
to them at all, or why they were put forward by the 
Commission, in the way they were, to justify the 


136 CASES BROUGHT IN THE COMMERCE COURT. 

order, if they had no influence upon it. The effect 
of the answer therefore is to eliminate this part of the 
report, aside from the other considerations which 
also do so. 

Equally immaterial is the statement that the rates 
from Virginia cities to Montgomery and Selma are 
less than from New Orleans, although covering twice 
the distance; or that those from north Atlantic ports 
to points in the southeastern territory basing on 
Montgomery are more favorable, length of haul and 
number of lines considered; which are some of the 
minor things entering into the decision. And es¬ 
pecially is this to be said of the water rates from 
New York and Boston to Mobile and New Orleans, 
which have no perceptible bearing on the rail rates 
between the latter two places in the connection in 
which they are cited. 

By contrast with this, it might be inquired why 
the Commission in making comparisons took no 
note of the rates established by the railroad 
commissions of Alabama and Georgia, which 
show that, for 141 miles, the distance between 
New Orleans and Mobile, the accepted-as-controlling 
factor in the situation, the rates by the Louisville & 
Nashville Railroad, which have been condemned and 
reduced by the Commission as unjust and unreason¬ 
able, were materially less than the maximum or 
so-called standard tariff established by the Georgia 
commission, and much lower still than the rates 
which were permitted to the Southern Railway in 


CASES BROUGHT IN THE COMMERCE COURT. 137 


Alabama, Georgia, Tennessee, and South Carolina; 
as will appear by the comparative table which is 
reproduced below, as taken from the evidence. 





Class- 





1 

2 

3 

4 

5 

6 

E. 

Louisville & Nashville rates from New 
Orleans to Mobile, 141 miles... 

50 

39 

38 

31 

27 

16 

20 

Southern Railway rates fixed by commis¬ 
sions of Alabama and Georgia for 141 
miles. 

75 

63 

56 

44 

35 

29 

35 

Minimum or standard tariff of Georgia 
Railroad Commission, 141 miles. 

60 

50 

45 

35 

28 

23 

28 

Southern Railway rates in Tennessee, 141 
miles. 

58 

50 

46 

37 

31 

27 

32 

Southern Railway rates in South Caro¬ 
lina, 141 miles. 

62 

52 

42 

39 

31 

24J 

31 

Southern Railway rates, Chattanooga to 
Birmingham, 143 miles. 

57 

49 

41 

32 

27 

19 

27 

Southern Railway rates Birmingham, 
Ala., to Columbus, Ga., 157 miles. 

57 

49 

45 

35 

28 

22 

27 

Southern Railway rates, Chattanooga to 
Atlanta, Ga., 138 miles. 

52 , 

45 

41 

32 

25 

20 

27 


Let us not be misunderstood upon this point. We 
recognize, of course, that comparisons are very com¬ 
monly made in the investigation of rate cases, and 
that they may often be quite persuasive. The com¬ 
petency of such evidence is not questioned nor the 
right of the Commission to give it due weight. 
Neither is it doubted that the Commission may receive 
evidence of this kind, giving to the facts so shown 
their proper value, without proof of similarity of 
conditions. But what we do hold is that the com¬ 
parisons made by the Commission in its report in 
this case, taking into account all the facts and cir¬ 
cumstances disclosed at the hearing, had no eviden¬ 
tiary bearing upon the reasonableness of the rates 






















138 CASES BROUGHT IN THE COMMERCE COURT. 

in dispute, and therefore furnish no appreciable sup¬ 
port of the Commission’s conclusion. 

As a further justification for the reduction of the 
rates to Montgomery the Commission suggests that 
the rate per ton per mile, on an average of the first 
six classes of freight, is much greater from New 
Orleans than from Memphis, St. Louis, or Louis¬ 
ville. It is not said, as will be noted, that the 
rates to Montgomery are higher than from Memphis 
and the other places mentioned, but that, consid¬ 
ering the distance, the rate per ton per mile is 
greater. But it is the ordinary and recognized rule 
that the ton-mile rate should decrease as distance 
increases, other things being equal, and we therefore 
fail to see how the lower ton-mile rate for the greater 
distances from Memphis, St. Louis, and Louisville 
tended in any respect to show the unreasonableness 
of the rates here in question. 

Finally, as a summing up of this part of the case, 
the Commission says: “The manufacturers and ship¬ 
pers of oil, paper, stovepipe, tinware, galvanized tubs, 
furniture, soap, window glass, paints, hardware, and 
other articles of like kind in daily use, testified that 
they v T ere unable to trade in the Montgomery and 
Selma territory on account of the high rates, and 
that upon former occasions they had made special 
efforts to build up a trade with cities located in this 
territory and points basing thereon, but in every 
instance they were compelled to abandon the fight 
on account of better freight-rate concessions from 
other markets, though at greater distances. With 


CASES BROUGHT IN THE COMMERCE COURT. 139 

respect to practically all of the commodities above 
enumerated schedules of comparative rates and dis¬ 
tances were filed corroborating complainant’s con¬ 
tention.” 

This statement also can be explained only on the 
theory that it relates to what the New Orleans Board 
of Trade alleged in its complaints and to conditions 
which may have existed in some degree before the 
road made the reductions and adjustments alreadv 
mentioned. But having reference to the class rates 
in question, to which the Commission’s order is con¬ 
fined, we are unable to find any evidence which tends 
to sustain the observations made with regard to the 
inability of New Orleans dealers to trade in the 
Montgomery-Selma territory. 

Take, for instance, the testimony of George P. 
Thompson, a wholesale grocer of New Orleans, the 
first witness who has anything to say on the subject. 
His testimony has mainly to do with Mobile and 
Pensacola. But being asked by counsel whether it 
would be possible to increase his business with Mont¬ 
gomery if the rates were adjusted on a fair basis 
he says that it would; a self-evident proposition, but 
by no means showing that the rates in force were not 
what they ought to be. The further statement which 
he is led to make by suggestion of counsel, that the 
rates from Memphis to Montgomery are lower than 
from New Orleans, can not refer to class rates, it 
being irrefutably shown that they are in fact higher. 
And the comparison made by counsel in a long lead¬ 
ing question with regard to the ra tes from Baltimore, 


140 CASES BROUGHT IN THE COMMERCE COURT. 

to which Mr. Thompson gives hesitating assent, is of 
no more significance than the similar comparison 
with other North Atlantic points made by the com¬ 
mission, already referred to. It is true that as to 
certain canned goods, such as beans and peas, he is 
handicapped, as he says, by the rates from such points 
as St. Louis and Memphis. But here again the ref¬ 
erence must be to commodity rates which have been 
adjusted, and must have been so understood by the 
Commission, as it does not include peas and beans 
in the list of articles said to be discriminated against 
by the rates to Montgomery. And this must also be 
kept in view when it is said by Mr. Thompson that 
he is kept out or that territory unless he is willing to 
absorb a part of the rates; which is not true as to 
class rates, the only ones which are here in question. 

W. 0. Hudson, manager of the Marine Oil Com¬ 
pany, the next witness, confesses that he knows noth¬ 
ing with regard to the Montgomery-Selma case. 
Being asked if he could do business in Montgomery if 
the rate were reduced to 13 cents a hundred, the re¬ 
duction subsequently made by the Commission, he 
declares that he could not, that the rate would eat him 
up, the explanation that he gives being that the great 
bulk of the oil which he handles comes from the Ohio 
and eastern fields, which are much nearer to Mont¬ 
gomery than he is. Notwithstanding this, and 
although he is the only witness who testified on the 
subject, oil is given by the Commission as one of the 
commodities shut out by the high rates from New 
Orleans into this territory. 


CASES BROUGHT IN THE COMMERCE COURT. 141 

E. C. Palmer, a wholesale paper man, admits that 
business with Montgomery has not been materially 
injured by the advance in rates, but avers that it will 
be when his customers understand the situation. He 
thinks that Nashville has an advantage over New 
Orleans in the rate on paper (as no doubt it has); and 
that, as compared with Baltimore, considering the 
haul, the New Orleans rate is “a little out of line” 
(although it is not in fact higher); but that, compared 
with Louisville, it is fair enough. And so far as being 
kept out of Montgomery is concerned, he says that, 
on the contrary, he ships there constantly. No one 
can read the testimony of this witness without being 
convinced that, except possibly as to Nashville, New 
Orleans is not only not discriminated against, but has 
an actual advantage in the rates on paper over every 
place that it comes in competition with in the Mont- 
gomery-Selma territory. 

A. D. McBride, a salesman engaged with the Na¬ 
tional Enameling & Stamping Company, says that 
he sells goods in Mobile and Pensacola, but not in 
Montgomery or Selma, because Atlanta, Ga., has 
lower rates and gets the business. As compared 
with St. Louis and Louisville he does not see that 
New Orleans is at a disadvantage, notwithstanding 
the efforts of counsel to have him say so. The com¬ 
petition which affects him is with Atlanta, and that 
is the whole of it. Nor even there does he charge 
that the advantage is an unfair one, but simply that 
the Atlanta rate to Montgomery is lower, and keeps 
him out of there. Notwithstanding this state of 


142 CASES BROUGHT IN THE COMMERCE COURT. 

the evidence, however, stovepipe, tinware, and gal¬ 
vanized tubs, the commodities that this witness 
deals in, he being the only one called to testify with 
regard to them, are included by the Commission among 
those which it is declared that New Orleans dealers 
on account of the high rates have been unable to 
sell in the Montgomery-Selma territory, being com¬ 
pelled to abandon the fight, as it is said, after an 
attempt to build up the trade, a statement as to 
which there is no approach in the testimony. 

J. W. C. Wright, president of the New Orleans 
Furniture Manufacturing Company, says that Mont¬ 
gomery is not important to them. They ship some 
furniture there, but have not solicited the trade very 
strongly; and substantially the same thing is testi¬ 
fied by P. Jung, of the Crescent Bed Company, an 
iron-bed manufacturer. 

S. Steinhart, a manufacturer of soap, sells soap in 
Montgomery, where he says he encounters a rate of 
only 19 cents from Nashville as against 23 cents from 
New Orleans, but there is no 23 cent class rate from 
New Orleans, and he must therefore be referring to a 
commodity rate, which, as we have already seen, has 
no bearing. 

J. W. Bray, another witness, who is treasurer and 
manager of the Campbell Glass & Paint Company, 
says that they are shut out of Montgomery and 
Selma, the rates being such that they are unable to 
ship there. But so far as the paint business is con¬ 
cerned, he also says that it is handled entirely from 
St. Louis, where his company has a house from which 


CASES BROUGHT IN THE COMMERCE COURT. 143 

they prefer to ship, the rate being more advan¬ 
tageous; and that as to their glass business, Mont¬ 
gomery is not a normal point for it, which hardly 
makes out that the rates from New Orleans are too 
high or that he has ever tried unsuccessfully to ad¬ 
just them. 

Harry Moore, who is in the wholesale hardware 
business, declares that he can not compete with St. 
Louis, Louisville, and Nashville; but he gives as a 
reason, that, while these places are only one-half 
the distance from producing centers, such as Pitts¬ 
burgh and that territory, they pay one-third the 
rate, and are thus able to get into Montgomery and 
Selma, and places basing on them, at much less than 
he can. But the discrimination here, as is evident, 
is in the rates from producing centers to the dis¬ 
tributing points named; and it is impossible to 
expect that this should be made up to New Orleans 
by a back rate to Montgomery that would absorb 
the difference. 

It is difficult therefore to see, in view of the testi¬ 
mony of these several witnesses, how furniture, soap, 
window glass, paints, and hardware were included as 
they are in the statement by the Commission, which 
has been referred to. 

George Weigand, who is in the provision business, 
and who has been “howling to heaven,” as he says 
with regard to the rate increase complained of, 
refers only in this to the rates to Mobile, having 
never tried to go to Montgomery or Selma. 


144 CASES BROUGHT IN THE COMMERCE COURT. 

S. Odenheimer, a manufacturer of cotton goods, 
makes general complaint of the discrimination in 
rates from all competitive points where there are 
cotton mills to Montgomery and Mobile. But it 
appears from his testimony that there are cotton 
mills at Montgomery and Mobile as well as at New 
Orleans, to say nothing of the other places men¬ 
tioned, and it is altogether unreasonable to expect 
that rates on cotton manufactures should be put so 
low that mills at other points shall be able to compete 
with those actually on the ground. The Commission 
makes no reference to cotton goods in connection 
with the Montgomery rate, and therefore evidently 
took this view. Mention was also made by this 
witness, that the rates southerly from Montgomery 
to New Orleans were lower than those northerly from 
the one place to the other. But the explanation given 
him by the company was that there are a good many 
empty cars going in the direction of New Orleans and 
none the other way, which might properly justify the 
distinction. 

R. J. Wood, manager of the Gulf Bag Company, 
manufacturers of burlap bags, testifies that at one 
time, although not recently, they consigned goods to 
friends in Mobile to have them reconsigned to other 
points in Alabama, because the combination on 
Mobile was less than the rates through there. He 
also says that the question of the rates from New 
Orleans to Montgomery and Selma being higher than 
the combination on Mobile was an old one, and had 
been up ever since he was connected with the New 


CASES BROUGHT IN THE COMMERCE COURT. 145 

Orleans Board of Trade, some seven years, complaint 
being made and efforts put forth to correct it. All 
that his company have ever asked, as he says, is the 
same rates that eastern ports have to points halfway 
distant to New Orleans, which they have never got, 
and are therefore at a disadvantage. They have 
better rates, comparatively speaking, according to 
this witness, to the Carolinas than to Alabama and 
Georgia, and there are eighteen or twenty points in 
Georgia to each of which the mileage is less from New 
Orleans than from New York, Philadelphia, or Bal¬ 
timore, and yet the rates are invariably higher; in 
consequence of which the southeast, for his company, 
is a dumping ground, where they get rid of any over¬ 
plus, but do not expect to make money. They sell 
at Atlanta, but make nothing. That city is a bag 
consumer, but there is a bag concern there, and 
Atlanta itself complains of New Orleans. This ex¬ 
tract from the testimony of this witness is perhaps 
unnecessary, as the Commission does not include bur¬ 
lap or gunny bags among the articles alleged to be 
discriminated against, so far as concerns the Mont- 
gomery-Selma territory. It is only Mobile as to 
which this is predicated with regard to these articles, 
and it will be noted that what he says has no appli¬ 
cation to Mobile. 

In this connection a protest, dated August 6, 1902, 
drawn up by the attorney of the New Orleans Board 
of Trade, was introduced in evidence before the Com¬ 
mission, in which the existence of discriminating rates 
against New Orleans into the southeastern territory 

48250—S. Doc. 789, 62-2-10 


146 CASES BROUGHT IN THE COMMERCE COURT. 

was charged, the fact that the through rate to Mont¬ 
gomery and Selma was higher than the Mobile com¬ 
bination being also mentioned. New Orleans and 
Mobile, as it is there contended, stand in the same 
relation to the sources of supply and are competitors 
to points be}mnd them, and claim is made that out¬ 
bound rates from New Orleans should therefore carry 
but slight differentials. The rest of the paper is 
mainly an argument why New Orleans should be put 
on an equality of rates which would permit of com¬ 
petition with New York and Baltimore as well as 
Georgia, the Carolinas, and Virginia—a broad ques¬ 
tion not in issue here, as already pointed out, and 
therefore not relevant or properly to be considered. 

This completes the evidence on this branch of the 
case and there is no need to dwell on the view to be 
taken of it. Considered severally or collectively, it 
contains nothing which we can discover that sup¬ 
ports the conclusions of the Commission with respect 
to the Montgomery rates, outside of the fact that, if 
the reduction is to stand to Pensacola and Mobile, 
it calls for a reduction to Montgomery to equalize 
the sum of the locals. It is not simply that the 
weight of the evidence does not sustain the reasons 
assigned by the Commission in its report, but that 
there is no substantial basis for those reasons in the 
testimony passed upon. 

The Mobile and Pensacola rates remain to be con¬ 
sidered, both on their own account and as the essential 
basis of the rates to Montgomery. It is to be noted 
with regard to these that as the law then stood the 


CASES BROUGHT IN THE COMMERCE COURT. 147 

mere fact that they were increased by the company 
over what they had been previously creates no pre¬ 
sumption that they were not fair and reasonable. 
{Interstate Commerce Commission v. Chicago Great 
Western Railroad , 209 U. S., 108.) Nor did it justify 
the Commission in putting them back to what they 
had been, without regard to whether that could be 
properly said of them. But this again is practically 
all that there is to sustain the Commission’s action. 
It is undisputed that these rates to Pensacola and 
Mobile were the result of severe water competition, 
and that this had disappeared at the time of the 
increase. “At the date of the hearing,” say the 
Commission, “ carriage by water was infrequent 
and cut but little figure as a competitor” with the 
railroad. It is also stated that while the rates 
by rail were generally higher than by water, this 
was not the case in the third, fourth, and fifth 
classes, under which the bulk of the freight between 
New Orleans and Mobile moved; notwithstanding 
which, the Commission proceeded to reduce the rates 
for these classes to what they had been before, actu¬ 
ally making them 6, 9, and 8 cents, respectively, be¬ 
low the established water rates as they then stood. 

Take also the relative result brought about by the 
Commission’s action. It may be that no point should 
be made of the fact that, taking the rate on first- 
class goods, which the Commission accepts as fair, 
having made no change in it, the other rates are 
disproportionately low by comparison. This is the 
uncontradicted testimony of some of the witnesses, 


148 CASES BROUGHT IN THE COMMERCE COURT. 

though it may be said that the Commission was not 
bound to adopt their view of it. But that there is a 
material disparity is observable on the face of things, 
and also that it breaks in upon the ratio established 
by the railroad, which was accepted and lived up to 
all these years—a somewhat significant circumstance. 
More than that, however, in making the rates on fifth 
and sixth class goods 35 cents each to Montgomery and 
15 cents each to Mobile, while they are 20 and 15 
cents, respectively, to Pensacola, the classification is 
inconsistent, to say nothing of the testimony of 
some of the witnesses, who assert without contra¬ 
diction that if 15 cents is correct for the sixth 
it is too low for the fifth class; while in fixing the 
rate to Montgomery at 77 cents on second class and 
55 on third class—based on a 37 and 25 cent rate to 
Mobile, respectively—there is a drop of 22 cents, 
which, according to the undisputed evidence, creates 
a disproportion between these two classes that is 
unprecedented in all that territory. And the same 
is true as to the 12-cent drop between these classes 
in the rate to Mobile, which is a reduction of 33 per 
cent on the face of one and 50 per cent on the face 
of the other, according to the one that is taken for com¬ 
parison. It is no answer as to any of these Mobile 
rates that there were the same inconsistencies in 
the formerly prevailing rates of the railroad. These 
were competitive rates with respect to which noth¬ 
ing reliable can be predicated without knowing 
just what produced them. The resort to them for 
justification in this way merely serves to demon- 


CASES BROUGHT IN THE COMMERCE COURT. 149 

strate the intimate relation which they bear to the 
order of the Commission. 

It is said, however, in the report of the Commis¬ 
sion that the Mobile and Pensacola rates had remained 
substantially unchanged for over 20 years, and that 
there was no evidence that they had not been com¬ 
pensatory. At the time this statement was made the 
increased rates were in force which were established 
in 1907, and not the old ones in existence before that. 
And it was the unreasonableness of these new rates 
which the complainants in the proceeding had the 
burden of showing. There was no adverse presump¬ 
tion to be indulged, as we have seen, because of the 
increase. ( Interstate Commerce Commission v. Chi¬ 
cago Great Western Railroad, 209 U. S., 109.) Nor is 
a voluntary rate, established to meet competition, to 
be taken as the measure of what is reasonable. ( Lake 
Shore R. R. v. Smith, 173 U. S., 684; Frederick v. 
N. Y., N. H. & H. R. R., 18 Inter. Com. Com. Rep., 
481, 484; Breese v. Trenton Mining Co ., 19 Inter. 
Com. Com. Rep., 598, 600.) And yet that in effect 
is just what the Commission did in suggesting, in 
defense of the reduction and restoration which it 
undertook to make, that the previous rates were not 
shown negatively not to have been compensatory. 
It was not incumbent on the railroad at that stage to 
make this out, but on the complainant to show 
that the rates as they stood were unjust and 
unreasonable. The position taken here, on behalf of 
the Commission, is that a rate, however low, can not 
be condemned as unjust if it yield any, the most 


150 CASES BROUGHT IN THE COMMERCE COURT. 

insignificant, return above the cost of service, a 
proposition we are not prepared to accede to. 

As further justifying the reduction made, it is 
declared by the Commission that the rates to Mobile 
and Pensacola exceeded the rates from New Orleans 
to other water-transportation points, such as Natchez, 
Vicksburg, Greenville, and Memphis, where the dis¬ 
tances are greater. This clearly is not true as to 
Mobile, whatever may be the case as to Pensacola. 
The rates from New Orleans to the Mississippi 
River points mentioned, as contrasted with those to 
Mobile, according to the schedule at the time on 
file with the Commission, will appear by the fol¬ 
lowing table: 


Classes— 



2 

3 

4 

5 

6 

E 

Rates to Natchez, Vicksburg, Greenville, and 
Memphis. 

40 

32 

25 

20 

17 

15 

Rates to Mobile as reduced by the commission. 

37 

25 

18 

15 

15 

15 


It may be that the Commission in the statement 
which it made had the rates in mind as raised by the 
railroad, as to which, however, it would be true 
only with respect to the third, fourth, and fifth 
classes. But that is not the way it is put, nor is 
it the use made of it in argument, which is that the 
rates to Mobile as they previously stood and as they 
were reduced and restored still exceeded those to 
the other water-transportation points which are 
mentioned, which is a clear misapprehension. 














CASES BROUGHT IN THE COMMERCE COURT. 151 

It is also said by the Commission in the same con¬ 
nection that these rates exceed those from Nashville, 
Memphis, Cincinnati, and Louisville to points ap¬ 
proximating the same distance. There is no way of 
knowing on what this is predicated, there being no 
reference to any schedules or tables of comparison 
by which to verify it. Neither is there anything in 
the evidence before the Commission which apparently 
warrants it. And by contrast, in the evidence taken 
under the bill which is now before us, it is proved 
without contradiction that in a large number of in¬ 
stances the fact with regard to the rates from the 
places named is just the opposite. 

Another ground taken by the Commission to justify 
its action is that the rates between New Orleans, 
Mobile, and Pensacola, until the advance made by 
the railroad, were identical in both directions, west¬ 
ward as well as eastward, a condition which pre¬ 
vailed, as it is said, between other cities, such as New 
Orleans, Memphis, Greenville, Vicksburg, and Nat¬ 
chez, and that the raising of rates in the one direction 
resulted in a disturbance of relations between points 
where geographic and commercial conditions called 
for equality. But it has often been recognized by 
the Commission that the mere fact that a rate is 
higher one way between the same points than it is 
the other does not prove that the higher rate is un¬ 
reasonable. (.Duncan v. Atch ., Topeka & Santa Fe , 
6 Inter. Com. Com. Rep., 85, 103; McLoon v. Boston 
& Maine R. R., 9 Inter. Com. Com. Rep., 642; Weil 
v. Pa . R. R., 11 Inter. Com. Com. Rep., 627.) And 


152 CASES BROUGHT IN' THE COMMERCE COURT. 

this is particularly true where there is a preponder¬ 
ance of empty cars moving in the one direction, of 
which there is here some suggestion. There is also 
some evidence that the rates westward from Mobile to 
New Orleans are lower than they should be; all of 
which goes to show that there is practically nothing 
to be made out of this contention. 

It is further said by the Commission that the ad¬ 
vances made from New Orleans to Mobile in the enu¬ 
merated classes were severely felt by certain shippers 
in the former city, especially those engaged in job¬ 
bing canned goods, lard, flour, coffee, oil, crackers, 
pickles, vinegar, beans, etc.; that New Orleans is an 
important distributing market for canned beans, 
some four hundred to five hundred carloads being 
handled there; and that the increase on this com¬ 
modity was particularly burdensome, if not prac¬ 
tically prohibitory of shipping into New Orleans and 
out to Mobile. That the advances made in the rates 
on these classes of goods would be severely felt by 
certain shippers is not a sufficient reason for hold¬ 
ing that they were not what they ought to be. 
Such an advance would of course be felt, and so 
would any other change in market conditions which 
affected the cost of handling. With regard to the 
other statements made by the Commission in this 
connection, it is undoubtedly true that New Orleans 
and Mobile are both jobbing points; but so far as 
concerns beans, they get their supply from practically 
the same markets and at the same freight rates. In 
this respect they are rivals; and it is altogether out of 


CASES BROUGHT IN THE COMMERCE COURT. 


153 


line to expect that the rates on beans from New Or¬ 
leans to Mobile should be so reduced that the jobbers 
in New Orleans can compete with those in Mobile, 
and thus invade the latter’s own home market. A 
counter protest from the jobbers in Mobile, if this 
were done, would be in order as a matter of self¬ 
protection, and would have to be listened to. The 
same is true with respect to the other commodities 
named; as it is also with regard to paper, stovepipe, 
tinware, tubs, and galvanized-iron tubs, as to which, 
according to the Commission, the advance in rates 
made by the railroads would have to be absorbed 
by the manufacturers. 

The evidence with regard to all this is not in con¬ 
flict. Take, for example, the testimony of George 
P. Thompson, president of the New Orleans Grocers 
Association, which has already been referred to in 
connection with the rate to Montgomery. He has 
been selling canned goods, crackers, and baking 
powder at Mobile for a number of years, as he says, 
and the advance in rates, according to his state¬ 
ment, has affected him materially. There has also 
been a serious falling off in peas and beans, partic¬ 
ularly the black-eyed beans which are dried in bags, 
the best coming from California. Mobile, as he says, 
is a large consumer of these for export and other¬ 
wise, and if New Orleans is shut out from there, it 
means a control of the bean business by the rail¬ 
road. But he admits that Mobile can buy beans 
from California as cheaply as he can, and that the 
rate from there to each of these two cities is the 


154 CASES BROUGHT IN THE COMMERCE COURT. 

same. And he, therefore, when you come to analyze 
it, simply wants the local rate from New Orleans to 
Mobile kept down to a point where he can have a 
chance to compete at Mobile or places basing on 
there with the Mobile jobber on the same product. 
So also with regard to canned goods, baking pow¬ 
der, candles, etc., the rates on which from Mem¬ 
phis to Mobile are shown to be less than from New 
Orleans; the comparison so made is of no particular 
significance without a consideration of how the rates 
from Memphis happen to be what they are (whether 
these rates are class or commodity), and why that 
city enjoys this apparent advantage. Mr. Thompson 
also speaks of New Orleans as a great distributing 
port for olive oil and coffee, and thinks that recog¬ 
nition should be given it on outbound rates accord¬ 
ingly; but except that Mobile buys oil from New 
Orleans he makes no application of his statement. 

W. 0. Hudson, manager of the Marine Oil Com¬ 
pany, says he is forced into competition at Mobile 
with oil from the Ohio oil field, from whence also he 
gets his supply from the National Refining Company, 
which has refineries at Cleveland, Marietta, and 
Findlay. He stocks up for Mobile from there, but 
it would suit him better to do so from New Orleans, 
which would relieve him from the necessity of carry¬ 
ing so many men, and where his facilities are greater. 
These purely personal considerations have no bearing, 
of course, on the reasonableness of these rates, which 
are not to be fixed to accommodate any particular 
person’s business. 


CASES BROUGHT IN THE COMMERCE COURT. 155 

There is but one witness, Mr. E. C. Palmer, who 
has anything to say about the paper industry. Testi¬ 
fying eight months after the advance in rates had 
gone into effect, while he feels that it may be injurious 
when his customers get onto the idea, he admits that 
so far it has not been so. His concern also is only 
as to goods going through Mobile to points beyond 
and not as to Mobile proper, although he does busi¬ 
ness there. New Orleans, as he says, is the principal 
distributing point in the South for newspaper ma¬ 
terial, competing with St. Louis, Cincinnati, and 
Nashville, but having an advantage in rates, as a rule, 
from western points of manufacture, the rates to 
New Orleans and to Mobile being equal. There 
would seem to be nothing calling for relief in this 
situation. 

So, also, with reference to stovepipe, tinware, tubs, 
and galvanized tubs, Mr. McBride, of the National 
Enameling Company, says that the manufacturers 
have not been compelled to absorb the advance, as 
stated by the Commission, although he thinks it 
probable in the end that they may have to do so. 
Prices have been increased to the extent of the ad¬ 
vance, but no one in Mobile has declined to buy on 

account of it. It simply has increased the cost to 

the jobber, and he, in turn, sells higher to the retailer. 
He admits that the New Orleans manufacturers still 
have a lower rate to Mobile than any other point with 
which they come in contact; but the difference is 

slight, and it would take but a small advance to 

equalize it. The trade at Mobile has been accus- 


156 CASES BROUGHT IN THE COMMERCE COURT. 

tomed to buy goods delivered, and it is going to be 
difficult, as he says, to get the increase from them in 
the future, although the New Orleans manufacturer 
is now doing so. Under normal conditions the manu¬ 
facturers would have to absorb the advance and keep 
the Mobile jobber on a par with others, but now it is 
done by the jobber. 

There is nothing in any of this to sustain the 
findings of the Commission which have been referred 
to, or to justify the reduction which it has 
ordered. The rates to Mobile were so low before 
that the manufacturers in New Orleans could afford to 
absorb them and did so. They can not perhaps afford 
to do so now. And because the Mobile jobber has 
become accustomed to get his goods free, the manu¬ 
facturers in New Orleans anticipate trouble. But 
this is a possibility which the railroad can not be 
required to prevent; and the situation as disclosed 
by this witness indicates that the former rate was 
certainly low. 

Again, the Commission makes the statement that 
the advance in rates on furniture, iron beds, etc., 
had practically closed out the business with Mobile 
in these articles, better rates being made on them 
from other manufacturing points, such as Atlanta, 
Ga., and High Point and Winston-Salem, N. C. 
This is a clear mistake of fact, due, no doubt, to in¬ 
advertence, but none the less serious, it being the 
uncontradicted evidence that, with one single excep¬ 
tion, where the rate from Atlanta to Mobile is a cent 
lower than from New Orleans, all the rates on all 


CASES BROUGHT IN THE COMMERCE COURT. 157 

the articles named from the three places mentioned 
are not only higher, but very materially higher, than 
from New Orleans. It is true that, according to 
Mr. Wright, there is a restrictive loading rule with 
regard to furniture from New Orleans to Mobile 
which is not imposed as to Nashville and Memphis. 
But this does not apply to any other points, and, 
w r hile it apparently gives some advantage to Mem¬ 
phis over New Orleans, Nashville is simply put on 
an equality with it. It is to this rule, also, and to 
the changed classification of mixed furniture in car 
loads, that he ascribes his loss of trade, rather than 
to the present rate advances. 

The testimony of P. Jung, another iron-bed manu¬ 
facturer, is even less to the purpose. He says he 
never sought the Mobile field nor made any effort to 
get into Pensacola and has not been affected by the 
advance in rates to these places. Before the advance 
he solicited business throughout Alabama and Geor¬ 
gia, but found that he would have to guarantee rates 
as against Atlanta, High Point, and Winston-Salem, 
and that the trade did not warrant it. Evidently the 
increase did not harm nor would the reduction help 
him. 

This is all the evidence there is as to furniture and 
iron beds, and it is clear that it does not in any par¬ 
ticular support the statement of the Commission. 

It is further said, however, by the Commission that 
the advance in rates on bags, burlap, gunny, and 
jute, was vigorously opposed and a strong protest 
also made on account of the alleged discrimination 


158 CASES BROUGHT IN THE COMMERCE COURT. 

against New Orleans in cotton goods, it being 
asserted that other manufacturing points were given 
more favorable rates. This is sought to be sustained 
as to cotton goods by a comparison of rates from 
Virginia and North and South Carolina points, as 
well as from Augusta, Ga., and even from New York 
and Boston. The suggestion that the advance was 
vigorously opposed or that a strong protest was made 
affords neither evidence nor argument. This is 
always to be looked for where there is an increase in 
prices, whether warranted or unwarranted. Nor is 
anything more to be made out of the rate comparison. 
The Commission does not say that the rates to Mobile 
on cotton goods are less from other manufacturing 
points than from New Orleans, which is not the fact, 
as is demonstrated by the evidence, but only that the 
rates are more favorable. But this is based on the 
mere matter of distance, which is no criterion, as 
already stated, without the consideration of other 
attending conditions. As pointed out also in con¬ 
nection with the Montgomery rates—according to the 
testimony of Mr. Odenheimer, on which this part of 
the case is evidently based—there are cotton mills both 
at Mobile and Montgomery, as well as at the other 
competing points named, and it is not to be expected 
that rates on cotton goods should be put so low that 
New Orleans manufacturers would have an advan¬ 
tage over all others in that territory beyond what 
they already have; which would be the rankest dis¬ 
crimination. And the matter of burlap and gunny 
bags is not much different. The testimony of Mr. 


CASES BROUGHT IN THE COMMERCE COURT. 159 

R. J. Wood is directed to this and has already been 
considered in another connection. So far as Mont¬ 
gomery and Pensacola are concerned, he frankly says 
that the advances have not injured his business. 
His complaint is as to points beyond, with regard to 
which he has not a little to say, but it has been dis¬ 
cussed above and there is no occasion to again go 
over it. 

This completes the case as to Mobile; and that with 
regard to Pensacola, except that it is still weaker, is 
no different. It is said by the Commission that the 
advance in rates “ was not so heavy or so injurious to 
the merchants in New Orleans in their trade with 
Pensacola as the advance to Mobile, but they strongly 
protested against it, and it was shown that, propor¬ 
tionately, like conditions resulted from the advance as 
were produced by the increase in rates to Mobile.” 
But there is nothing to sustain this statement. One 
witness, Mr. Palmer, a paper dealer, says that he 
would be affected in Pensacola the same as Mobile; 
but he is not affected at all at Mobile and can not, 
therefore, be at Pensacola. Another, Mr. Steinhart, 
who deals in soap, says that they get no orders from 
Pensacola because the rate is said to be so high; 
and what he wants and thinks the company should 
come down to, as he is not slow in saying, is a 10 or 
12 cent rate, the same as on rice and sugar, which 
is hardly to be expected. The other witnesses called, 
to a man, declare either that they have no complaint 
to make or that their business at Pensacola is slight or 
that they have not been affected; and yet the Com- 


160 CASES BROUGHT IN THE COMMERCE COURT. 

mission finds with regard to the trade with Pensacola 
what has just been stated. 

Opposed to the evidence which has been thus re¬ 
ferred to—if there can be said to beany opposition to 
what is so irrelevant and wanting in persuasiveness on 
the question as to what is reasonable—there are several 
witnesses produced by the railroad company of large 
experience, who testify that the rates prescribed 
by the Commission, both to Mobile and Pensacola, 
as well as to Montgomery, are unjust and unfair, 
under all the circumstances, and among others; 
because they are less than those usually and ordi¬ 
narily charged by the company, as well as by other 
railroads for the transportation of like classes of 
property between other points in the South sepa¬ 
rated by similar distances; because the rates which 
were cut down permitted a free movement of traffic 
and there were no competitive or commercial condi¬ 
tions calling for a reduction; and because the rates as 
reduced would give to New Orleans an undue and 
unreasonable advantage and preference over Vicks¬ 
burg, Memphis, and other Mississippi and Ohio cross¬ 
ings, and would disrupt and destroy the relative 
adjustment and the general system of rates which 
have prevailed in the southeastern territory ever 
since the Cooley arbitration. It is also indisputa¬ 
bly shown that the New Orleans-Mobile line along 
the Gulf coast is exceptionally difficult and costly to 
operate; that a considerable portion of it consists of 
long trestles and bridges which are subject to extra¬ 
ordinary damage and sometimes to a complete 


CASES BROUGHT IN THE COMMERCE COURT. 161 

destruction by floods and freshets in the streams 
which they span; that its proximity to the Gulf lays 
it open to the full force of the Gulf storms and hurri¬ 
canes, by which it was entirely put out of business 
for nearly a month in the early fall of 1909, and for 
considerable periods at different times previously; 
that the intermediate territory traversed is so sparsely 
settled and its freight traffic so small that the suc¬ 
cessful and profitable operation of the line is nec¬ 
essarily dependent on the through traffic between 
New Orleans and Mobile and points beyond, in con¬ 
sequence of which the company has never received 
even a fair return from its operations; and finally, 
that the cost of operation by reason of the increase in 
wages, in maintenance, and in the price of locomotives, 
cars, and other matters of equipment, has grown so 
enormously in the last few years that to go back to 
rates established under earlier conditions, when there 
was active water competition, instead of being fair 
and reasonable, is to work great, and manifest injus¬ 
tice in disregard and in the face of this undisputed 
showing. 

There was no attempt to meet the case as so made 
out for the company either by way of argument or 
otherwise. Counsel for the Commission and for the 
Government simply rely on the authority of the 
Commission to determine what is a reasonable rate 
and the conclusiveness of its judgment where it has 
done so, against which, it was argued, the courts can 
afford no relief unless the rate which has been fixed 
is shown to be confiscatory. But this contention, 

48250—S. Doc. 789, 62-2-11 


162 CASES BROUGHT IN THE COMMERCE COURT. 

as presented and sought to be applied in the case at 
bar, must be rejected. In our judgment, it was never 
intended to confer on the Commission any such un¬ 
restrained and undirected power. As already pointed 
out, the law provides for a hearing and it must be 
more than a shadow. Both parties are entitled to be 
confronted with the evidence on which the case is to 
be determined, and the conclusion reached must be a 
reasonable inference from the facts disclosed by the 
investigation. This construction of the Commis¬ 
sion’s authority and the conditions which limit its 
exercise appear to us clearly and definitely settled 
by the recent decision in Interstate Com. Com. v. 
Union Pacific R. R., supra , which is the latest 
and fullest utterance of the Supreme Court in a case 
of the same general class as the one now under con¬ 
sideration. Tested by the principles laid down in 
that decision, we are of opinion that the order here 
drawn in question must be held invalid as exceeding 
the delegated powers of the Commission, because 
there was no substantial evidence to sustain it. It is 
not merely that the evidence preponderates in favor 
of the reasonableness of the rates which have been 
cut down. Concededly, that would not be enough 
to challenge the action of the Commission. Not only 
is the Commission vested with a discretion which can 
not be disturbed, and which we intend unqualifiedly 
to respect, but it is entitled to select the testimony 
which it will believe and rely upon, according as it 
addresses itself to the discriminating judgment of the 
Commission. But it is not within the authority of the 


CASES BROUGHT IN THE COMMERCE COURT. 163 

Commission to reduce the rates in this or any other 
case not merely against the weight of the evidence 
produced to sustain them, but without anything 
substantial to warrant the conclusion reached or the 
reasons assigned therefor. And this we are convinced 
is a case of that character. The only discoverable 
basis for condemning the rates to Mobile and Pensa¬ 
cola is the fact that they had been advanced in 1907, 
and this of itself was clearly not sufficient. Inter¬ 
state Com. Com. v. Chicago Great Western, 209 U. S., 
108. If the long continuance of lower rates to these 
points or the circumstances connected with their in¬ 
crease called for explanation, as suggested in the case 
cited, the explanation made by the carrier, in the 
absence of anything to discredit it, must be held to 
sustain the advance as against any presumption that 
it was unreasonable, and therefore there was nothing 
substantial to support its condemnation. Nor is 
there anything of substance to sustain the reduction 
of the Montgomery rates except the fact that they 
exceeded the former combination on Mobile and 
Pensacola. Outside of these facts, having regard to 
the undisputed evidence adduced at the hearing, the 
existing rates were not shown to be unjust or unrea¬ 
sonable and there was therefore no valid basis for 
the Commission’s conclusion. 

And the petitioner is therefore entitled to a decree 
annulling the order. 

Mack, Judge, dissents. 















United States Commerce Court. 


No. 4.— April Session, 1911. 


Louisville & Nashville Railroad 
v. 

Interstate Commerce Commission, respondent. 
United States, intervening respondent. 


ON final hearing on bill, answer, and proofs. 

For opinion of Interstate Commerce Commission 
see 17 Inter. Com. Com. Rep., 231. 

For opinion of Circuit Court, refusing preliminary 
injunction, see 184 Fed., 118. 

Mr. Helm Bruce and Mr. W. G. Bearing for peti¬ 
tioners. 

Mr. W. E. Lamb for Interstate Commerce Com¬ 
mission. 

Mr. J. A. Fowler, Assistant to the Attorney Gen¬ 
eral, and Mr. Blackburn Esterline , special assistant 
to the Attorney General, for the United States. 

Mr. Alfred P. Thom and Mr. Walker D. Hines for 
Southern Railway. 

Mr. Edward Barton for Baltimore & Ohio South¬ 
western Railroad. 

Before Knapp, Presiding Judge, and Archbald, 
Hunt, Carland, and Mack, Judges. 

165 






166 CASES BROUGHT IN THE COMMERCE COURT. 

[March 12, 1912.] 

Mack, Judge , dissenting: 

The salient facts briefly stated are that prior to 
August, 1907, the through rates on certain classes 
from New Orleans to Montgomery exceeded the com¬ 
bination of rates in force from New Orleans to Mobile 
and Pensacola, respectively, and from these places to 
Montgomery. All of the rates had been in force for 
many years. No change has been made in the rates 
on that part of the road between Mobile and Pensa¬ 
cola, respectively, and Montgomery, but in August, 
1907, the rates from New Orleans to Mobile and 
to Pensacola, were advanced exactly enough to 
make the combination on these points equal to 
the through rate from New Orleans to Montgomery. 
While the railroad attempts to justify this advance 
by the assertion that the former rate was unreasonably 
low, having been put into effect many years before 
in order to cut out water competition, nevertheless it 
is admitted that the immediate cause of the advance 
was the announcement by the Commission of the rule 
that a through rate must not exceed the combination 
of the locals. To comply with the rule, it was neces¬ 
sary either to reduce the through rate from New 
Orleans to Montgomery to the sum of the locals or to 
raise one or both of the latter. The railroad chose 
the latter alternative; the Commission, by its order, 
endeavored to compel it to adopt the former. 

The Commission could do this only if it found that 
the new rates from New Orleans to Mobile and Pen- 


CASES BROUGHT IN THE COMMERCE COURT. 167 

sacola, respectively, and the unchanged rate from 
New Orleans to Montgomery were unreasonably high. 
If, on a review of the record before the Commission, 
this Court finds that there was no substantial evi¬ 
dence on which to base such a conclusion, it would be 
our duty to annul the order, inasmuch as the power 
of the Commission to reduce rates to a reasonable 
figure is conditioned on the opinion of the Commis¬ 
sion, formed after a full hearing, that the tariff rate 
is unreasonably high; not its arbitrary and uncon¬ 
trolled opinion, but its deliberate judgment based 
on substantial evidence produced at the hearing 
prescribed by the act. 

While this principle is that adopted in the opinion 
of the Court, I differ with my brethren in the appli¬ 
cation of it to the facts of this case. Whatever view 
I might have taken as to the reasonableness of the 
tariff rates had I been a member of the Commis¬ 
sion, I can not find that there is no substantial evi¬ 
dence to support the conclusions reached by it that 
they are unreasonably high. 

Let us first consider the raised rates from New 
Orleans to Mobile and Pensacola. While, as the 
majority of the court state, there is no presumption 
that they are unreasonable merely because the old 
rates have been raised, yet there is likewise no pre¬ 
sumption that they are reasonable merely because the 
carriers have put them into effect. When a rate is 
attacked immediately after it is made, there is no pre¬ 
sumption either for or against its reasonableness. If 


168 CASES BROUGHT IN THE COMMERCE COURT. 

it has been in force for some time and traffic has moved 
freely under it, a presumption does arise that it is 
reasonable. That presumption would be sufficient to 
make out a prima facie case in favor of the reasonable¬ 
ness of the rate to which it applied and therefore to 
shift the burden of going forward with some evidence 
that it is unreasonable. 

Apply these fundamental principles to this case. 
There is no presumption one way or the other as to 
the new rates. The ultimate burden of proof, at the 
time of this hearing and until the amendment of 1910, 
was on the shippers to show their unreasonableness. 
The absence of any presumption that they are 
reasonable was demonstrated when it was shown 
that they were put into effect just prior to this 
complaint; and a prima facie case that the old rates 
are reasonable and the raised rates therefore un¬ 
reasonable was made out when it was proved that 
the former had been in force for many years. 

The burden of going forward with evidence that will 
meet this prima facie case, or in other words, the obli¬ 
gation to give some valid explanation of the increase, 
now devolves on the carrier. This may be satisfied 
by showing that the old rates were compelled by water 
competition and that they are unreasonably low by at 
least the amount of the increase. But if the shippers 
prove that these water competitive rates had contin¬ 
ued for many years after actual water competition in 
any real sense had ceased, and under conditions 
clearly negativing any danger of a recurrence thereof, 



CASES BROUGHT IN THE COMMERCE COURT. 169 

the presumption of their inherent reasonableness 
again arises, and may, in the discretion of the Com¬ 
mission, be deemed sufficient proof thereof. 

The testimony before the Commission tended 
strongly to show that no renewal of water competi¬ 
tion was feasible after it had once ceased to be a 
factor in the transportation situation, because of 
labor conditions, wharf control by the railroads, and 
the justifiable fear that an investment in steamers by 
the shippers or others would be rendered worthless, 
inasmuch as the railroads would cut their rates to 
any extent necessary to secure the business. It must 
be remembered in this connection that at that time 
and until the amendment of 1910 railroads could cut 
their rates without restraint in order to destroy 
competition, and after accomplishing that purpose 
raise them again without the consent of the Com¬ 
mission. 

On these considerations alone and disregarding 
any other evidence the action of the Commission in 
finding the new rate unreasonably high to the extent 
of the increase over the old rate from New Orleans 
to Mobile and Pensacola, respectively, ought, in my 
judgment, to be sustained as against the charge of 
arbitrary or unjustified action. 

We come next to the consideration of the New 
Orleans-Montgomery rate. A presumption of its 
reasonableness arises from the fact that it had been 
long in force. To overcome this presumption, the 
shippers showed, first, that it was customary both 


170 CASES BROUGHT IN THE COMMERCE COURT. 

on this and other roads not to charge more for the 
through rate than the combination of locals, although 
admittedly this custom had not been enforced for 
this particular through traffic; secondly, that the 
Commission had now adopted a rule in accordance 
with the custom. 

Whatever the concession of the counsel for the 
Government may mean—and in my opinion it does 
not go so far as the majority of the court believe— 
the fact alone that the through rate exceeds the 
combination of locals is, in my judgment, an all- 
sufficient reason for a reduction to the extent of the 
excess. There may be peculiar and extraordinary 
circumstances which will cause the Commission to 
refrain from compelling such a reduction, but ordi¬ 
narily, and in the present case, the increased cost 
to the carrier of handling two local shipments and 
the economic waste involved therein as against a 
single through shipment, if the shipper should exer¬ 
cise his legal right of shipping from New Orleans 
to Mobile and then from Mobile to Montgomery on 
the local rates, amply justified the Commission in 
promulgating its rule and in enforcing it by the 
reduction of the New Orleans-Montgomery through 
rate. Congress, moreover, has now, by the amend¬ 
ment of 1910 to section 4 of the act to regulate 
commerce, given this rule the force of law. 

That the reduction ordered by the Commission in 
the New Orleans-Montgomery rate was exactly 
enough to make the through rate equal the com- 


CASES BROUGHT IN THE COMMERCE COURT. 171 

bination of locals as reduced is no more peculiar 
than that the increase by the carrier in the local 
New Orleans-Mobile and New Orleans-Pensacola 
rates was exactly enough to make the combination 
of locals as increased equal the former through rate. 
And when the principal witness of the carrier testifies 
(p. 323 of the testimony before the Commission) that 
in his judgment the raised rates “from New Orleans 
to Mobile are not too low, and I do not think they 
are too high,' 7 in other words, that they are exactly 
right, and he so testifies notwithstanding his frank 
admission (p. 272) that the cause of the raise was to 
check the application of the new rule to the old rates, 
the Commission can not, in my judgment, be said 
to have acted arbitrarily in not accepting this view 
of the result effectuated by the raise. 

While I differ with my brethren in their criticism of 
a number of statements made in the report of the 
Commission, it is unnecessary to discuss them here. 
For example, the view taken by the Commission of 
the Cooley adjustment is fully justified, in my judg¬ 
ment, by the fact that the relation of rates thereby 
established in 1886, was departed from not as to 
some, but as to a great many commodity rates and 
that, too, at many times; even as to class rates, there 
were departures not only in 1896, but also in 1905. 

Even though some errors of fact may be found in the 
report, these are clearly not the real basis of the order. 
Moreover, if any inequalities or undue preferences as 
against other localities result from the order of the 


172 CASES BROUGHT LN - THE COMMERCE COURT. 

Commission, they may be remedied on proper com¬ 
plaint, by the proper parties, to the Commission. 

The majority opinion is confined to a single ques¬ 
tion, and I have for that reason limited this dissent 
to a consideration of it. Without, therefore, discuss¬ 
ing the many interesting questions of confiscation 
and jurisdiction presented in the briefs and oral 
arguments, it suffices at this time to state that, in 
my opinion, the other grounds urged against the 
order of the Commission are equally unavailing and 
that the petition should be dismissed. 


United States Commerce Court. 


No. 5.— May Session, 1911. 


James J. Hooker and Ezra E. Williamson, re- 
spectively, President and Secretary of the Re¬ 
ceivers and Shippers' Association, of Cincinnati, 
Ohio, petitioners, 

v. 

Interstate Commerce Commission and The 
Cincinnati, New Orleans & Texas Pacific Rail¬ 
way Co., respondents. 

United States, intervening respondent. 

Mr. Francis B. James, for the petitioners. 

Mr. James A. Fowler, Assistant to the Attorney 
General, and Mr. Blackburn Esterline, special 
assistant to the Attorney General, for the United 
States. 

Mr. P. J. Farrell, for the Interstate Commerce 
Commission. 

Mr. Frank W. Gwathmey and Mr. B. Walton. 
Moore, with whom Mr. Edward Colston was on the 
brief, for the respondent carrier. 


173 




174 CASES BROUGHT IN THE COMMERCE COURT. 


Before Knapp, Presiding Judge, and Archbald, 
Hunt, Oakland, and Mack, Judges. 

[July 20, 1911.] 

Garland, Judge: 

In this opinion, for the sake of brevity, the Cin¬ 
cinnati, New Orleans & Texas Pacific Railway Co. 
will be abbreviated C., N. O. & T. P.; The Inter¬ 
state Commerce Commission will be abbreviated 
Commission; the Louisville & Nashville Railway 
Co. will be abbreviated L. & N.; and the Nashville, 
Chattanooga & St. Louis Railway Co. will be ab¬ 
breviated N., C. & St. L. 

Petitioners are firms, partnerships, and corpora¬ 
tions engaged in various kinds of mercantile, com¬ 
mercial, industrial, and manufacturing pursuits in 
Hamilton County, Ohio, and manufacture and pro¬ 
duce goods, wares, and merchandise, and sell an¬ 
nually large quantities thereof of great value, 
alleged in the bill to be several hundred thousand 
dollars, to purchasers located at Chattanooga, 
Tenn., which said goods, wares, and merchandise 
are enumerated in the freight tariffs and classifica¬ 
tions governing the same of the respondent, C., N. 
O. & T. P. Said petitioners have invested in build¬ 
ing up and maintaining their respective lines of 
business an amount exceeding the sum of 
$25,000,000. 

The C., N. O. & T. P. is a corporation duly or¬ 
ganized under the laws of the State of Ohio and 
is a common carrier engaged in the transportation 


CASES BROUGHT IN THE COMMERCE COURT. 175 

of goods, wares, and merchandise by railroad from 
the city of Cincinnati, Ohio, to the city of Chatta¬ 
nooga, Tenn., the northern terminus of said C., 
N. O. & T. P. being at Cincinnati and the southern 
at Chattanooga. 

On the 14th day of July, 1910, petitioners filed 
their bill of complaint in the Circuit Court of the 
United States for the Southern District of Ohio, 
Western Division, for the purpose of obtaining a 
judgment of that court setting aside and annulling 
an order of the Commission dated February 17, 
1910, but in fact rendered May 24, 1910, and which 
order is in the following language: 

“ This case being at issue upon complaint aud 
answers on file, and having been duly heard and 
submitted by the parties, and full investigation of 
the matters and things involved having been had, 
and the Commission having, on the date hereof, made 
and filed a report containing its findings of fact and 
conclusions thereon, which said report is hereby re¬ 
ferred to and made a part hereof, and having found 
that the present rates of defendant the Cincinnati, 
New Orleans & Texas Pacific Railway Co. (lessee 
of the Cincinnati Southern Railway) for the trans¬ 
portation of articles in the numbered classes of the 
Southern Classification from Cincinnati, Ohio, to 
Chattanooga, Tenn., are, to the extent that said 
rates exceed the rates named in paragraph 3 hereof, 
unjust and unreasonable. 


176 CASES BROUGHT IN THE COMMERCE COURT. 

“2. It is ordered, That said defendant be, and it 
is hereby, notified and required to cease and desist, 
on or before the 15th day of July, 1910, and for a 
period of not less than two years thereafter abstain, 
from exacting its present rates for the transporta¬ 
tion of articles in the numbered classes of the 
Southern Classification from Cincinnati, Ohio, to 
Chattanooga, Tenn. 

“ 3. It is further ordered, That‘said defendant 
be, and it is hereby, notified and required to estab¬ 
lish, on or before the 15th day of July, 1910, and 
maintain in force thereafter during a period of not 
less than two years, rates for the transportation of 
articles in the numbered classes of the Southern 
Classification from Cincinnati, Ohio, to Chatta¬ 
nooga, Tenn., which shall not exceed the following,, 
in cents per 100 pounds, to wit: 


Classy_ 1 2 3 4 5 6 

Rate_70 GO 53 44 38 29 


The C., N. O. & T. P. and the Commission filed 
demurrers to the bill. Subsequently the case was 
transferred to this court under the provisions of 
section 6 of the act to create a Commerce Court and 
to amend the act entitled “An act to regulate com¬ 
merce,” and the cause has now been submitted for 
decision upon the bill and demurrers. 

The bill of complaint is quite voluminous, con¬ 
sisting, exclusive of exhibits, of 66 printed pages. 
The material allegations, however, which in our 
judgment are necessary to be considered in order 





CASES BROUGHT IN THE COMMERCE COURT. 177 


to dispose of the case may be stated briefly as 
follows: 

In 1894 the Commission decided the cases of Cin¬ 
cinnati Freight Bureau v. C., N. 0. & T. P., and 
Chicago Freight Bureau v. L. & N-, et al (6 I. C. C. 
Rep., 195). These proceedings had been instituted 
by the commercial interests of Cincinnati and Chi¬ 
cago for the purpose of correcting an alleged dis¬ 
crimination in rates upon the numbered classes 
from points of origin in the Central West as com¬ 
pared with rates from points of origin in the East, 
to southern territory. The complaint of the Chi¬ 
cago Freight Bureau alleged that the rates for the 
transportation of freight from western to southern 
points upon the numbered classes from Cincinnati 
and other Ohio River crossings to southern points 
of destination were excessive, and that the rates 
from Chicago were even more excessive. Under 
this allegation the Commission held that it might 
inquire into the inherent reasonableness of these 
rates, and proceeded to dispose of the case upon 
that ground. The Commission held that the rates 
from Cincinnati were too high and should be mate¬ 
rially reduced. The following are the rates then in 
effect from Cincinnati to Chattanooga and those 
ordered by the Commission, showing the reductions 
made: 

Classes--- 1 2 3 4 5 6 


Rates in effect. 
Reoluced rates. 
Reductions- 


_ 76 65 57 47 40 30 

.. 60 54 40 30 24 22 

.. 16 11 17 17 16 8 







178 CASES BROUGHT IN THE COMMERCE COURT. 

The order of the Commission made in pursuance 
of this decision was not complied with by the car¬ 
riers, and the Commission thereupon instituted pro¬ 
ceedings in the Circuit Court for the Southern Dis¬ 
trict of Ohio to enforce obedience to its require¬ 
ments. Such proceedings were had in that suit that 
the Supreme Court of the United States finally 
directed a dismissal of the bill of complaint upon 
the ground that the act to regulate commerce as it 
then stood conferred no authority upon the Com¬ 
mission to establish a rate for the future; that 
this order was in effect the fixing of a future rate 
and therefore without warrant of law and void. 
(I. C. C. v. C., N. O. & T. P 167 U. S., 479.) 

When the interstate commerce law was amended 
in 1906 by giving to the Commission power to fix 
and establish a rate for the future, the Receivers & 
Shippers Association of Cincinnati commenced pro¬ 
ceedings before the Commission and against the 
€. r K O. & T. P. and the Southern Railway Co. for 
the purpose of obtaining the benefit of the holding 
of the Commission in the former case. As a result 
of a hearing had by the Commission in the proceed¬ 
ings last mentioned, the order complained of in this 
action was made. 

It is claimed by the petitioners that the maximum 
late fixed by said order is much too high and is 
extortionate, so much so that the Commission in 
making the order violated the fifth amendment to 
fihe Constitution of the United States which pro¬ 
hibits the taking of private property without due 


CASES BROUGHT IN THE COMMERCE COURT. 179 

process of law or without just compensation. 
While said order of the Commission was in full 
force and unsuspended in any way, the C., 1ST. O. & 
T. P. put into effect a schedule of rates for the 
transportation of freight between Cincinnati, Ohio, 
and Chattanooga, Tenn., in accordance with the 
maximum fixed by the Commission, and said rates 
are still in force. 

In the report of the Commission, which is made a 
part of said order, it is found as follows: 

^ If it is our duty to take this railroad by itself 
and to determine the reasonableness of these rates 
by reference to cost of construction, cost of mainte¬ 
nance, and profit upon the investment, we think the 
complainants have established their case and that 
these rates ought fairly to be reduced by as great an 
amount as was formerly found reasonable by this 
Commission. ” 

This language of the report refers to the finding 
made by the Commission in 1894, and the reduc¬ 
tions made then by the Commission appear in the 
table heretofore mentioned in this opinion. 

The bill in this case also alleges that if the schedule 
of rates fixed by the Commission in 1894 had been in 
force or had been applied during the years 1903 to 
1908, both inclusive, the yearly average net profit 
of the C., N. O. & T. P. would have been 40.66 per 
cent. It also appears from the bill of complaint 
that the city of Cincinnati owns the line of railroad 
between the city of Cincinnati, Ohio, and the city of 
Chattanooga, Tenn., which is commonly known as 



180 CASES BROUGHT IN THE COMMERCE COURT. 

the Cincinnati Southern, and now and during the 
times metioned in the bill operated by the C., N. O. 
& T. P. The road originally cost the city of Cin¬ 
cinnati $18,000,000, and the city subsequently spent 
for terminal facilities $2,500,000, making a total 
cost of the Cincinnati Southern to the city of Cin¬ 
cinnati of $20,500,000. The C., N". O. & T. P. leased 
this property, and is still leasing it, and the basis 
of rental returned to the city of Cincinnati prior to 
1906 was 6 per cent, and 5 per cent subsequent to 
that date. The C., N. O. & T. P. owns its own 
equipment and never did have any interest in the 
Cincinnati Southern beyond the right to use the 
property under the terms of the leasehold. The 
capital stock of the C., N. O. & T. P. for the years 
1903 to 1908, both inclusive, was $5,000,000, divided 
into $3,000,000 of common stock and $2,000,000 of 
preferred stock, and about the year 1908 it in¬ 
creased its capital stock by adding $500,000 of pre¬ 
ferred stock, making its entire issued capital stock 
for 1908 $5,500,000. The value of the property of 
the C., N. O. & T. P. between the years 1903 and 
1908, both inclusive, was $5,000,000, and after 1908 
was $5,500,000, and was all the property of the 
C., 1ST. O. & T. P. devoted to and employed in the 
public service and use and for the public conven¬ 
ience. 

The C., N. O. & T. P. is a single-track railroad 
from Cincinnati to Chattanooga, a distance of 336 
miles, without branches, and has an average gross 
earning per mile of $26,082.66. The L. & K runs. 



CASES BROUGHT IN THE COMMERCE COURT. 181 


from Cincinnati to Louisville, and from Louisville 
to Nashville, the distance from Cincinnati to Louis¬ 
ville being 114 miles and the distance from Louis¬ 
ville to Nashville being 185.9 miles. The distance 
from Cincinnati to Nashville via the L. & N. is thus 
shown to be 299.9 miles. Nashville is connected 
with Chattanooga by the N., C. & St. L., the dis¬ 
tance from Nashville to Chattanooga being 151 
miles, making the distance from Cincinnati to 
Chattanooga, via the L. & N. from Cincinnati to 
Louisville and Louisville to Nashville, and from 
Nashville to Chattanooga over the N., C. & St. L., 
450.9 miles. The direct haul from Cincinnati to 
Chattanooga via the C., N. O. & T. P. is thus 114.9 
miles shorter than the indirect haul via the L. & N. 
and the N., C. & St. L. by way of Louisville and 
Nashville. The average gross earnings, per mile, 
between Cincinnati and Chattanooga via the L. & N. 
and the N., C. & St, L. is $25,593.40. 

In view of the finding of the Commission hereto¬ 
fore mentioned, it necessarily follows that its order 
ought to have followed its findings, unless the 
reasons stated by the Commission for not doing so 
are valid. In this connection it must be remem¬ 
bered, however, that the power to establish reasona¬ 
ble and just rates for the future for the transporta¬ 
tion of freight by common carriers is vested by law 
in the Commission and no part thereof is vested in 
this Court, and this Court may not disturb the or¬ 
der complained of unless it can be clearly found 
that it conflicts with the provisions of the fifth 


182 OASES BROUGHT IN THE COMMERCE COURT. 

amendment to the Constitution of the United States, 
providing the power conferred has been regularly 
exercised. The order of the Commission itself does 
not fix a schedule of rates to be put in effect by the 
C., N. O. & T. P., but simply fixes a maximum rate 
beyond which the railroad may not go. The rail¬ 
road, however, upon the making of this order estab¬ 
lished the schedule of rates as high as the order 
would permit, and therefore it may be truly said 
that the schedule of rates put in effect by the rail¬ 
way company is the schedule of rates made by the 
Commission or at least authorized by it. All that 
this Court could do if it found the maximum sched¬ 
ule fixed by the Commission violated the constitu¬ 
tional rights of shippers over the C., N. O. & T. P. 
would be to set aside the order; but as the rates pre¬ 
scribed thereby have already gone into effect, and 
as this Court has no authority or power to establish 
rates or to order that any particular rate be put in 
effect, it necessarily results that the rates now in 
effect on the C., N. O. & T. P. would continue in 
effect unless changed by the carrier or the Com¬ 
mission. The carrier could change its rates if the 
order was set aside and even make them higher 
than they are now. The Commission could again 
investigate the matter and fix a new schedule of 
rates. So that it appears that all the shippers 
would gain in this litigation would be the vacation 
of the order, and if the court held that the rates 
permitted were so high as to be violative in a con¬ 
stitutional sense of the rights of the shippers then 


CASES BROUGHT IN THE COMMERCE COURT. 183 

no doubt the Commission would not again establish 
such a high schedule of rates. But in any event if 
we should set aside the order on constitutional 
grounds the shippers would be obliged to go again 
to the Commission for relief. At first we were in¬ 
clined to think that the result which would be ob¬ 
tained by a successful termination of this suit in 
behalf of the shippers would be so inconsequential 
as to render it unnecessary for this Court to take 
jurisdiction over the case, but upon further reflec¬ 
tion it would seem that the shippers have the right 
to a judgment of this court as to whether or not the 
schedule of rates contained in the order complained 
of is so high as to be violative of the fifth amend¬ 
ment to the Constitution as to the difference be^ 
tween what the Commission found would be reason¬ 
able if they considered the C., N. O. & T. P. by itself 
and the maximum rates that were fixed. Then if 
the shippers again went before the Commission 
they would have the benefit of the judgment of this 
court upon that subject. And in that view we pro¬ 
ceed to consider the question as to whether the 
reasons given by the Commission for not reducing 
the schedule of rates for the classes mentioned to 
the sums which the Commission found would be 
reasonable if the C., N. O. & T. P. should be con¬ 
sidered by itself are valid. 

It is claimed by the petitioners that the Commis¬ 
sion, having found that the so-called 60-cent sched¬ 
ule would be reasonable for the C., N. 0. & T. P. 
considered by itself, was bound to establish such 


184 CASES BROUGHT 1ST THE COMMERCE COURT. 

schedule as the result of its finding, and that the 
Commission’s establishing a higher schedule for 
the reasons mentioned in its report, while seem¬ 
ingly within its power to fix a reasonable rate, was 
really and in fact beyond its power, as the Commis¬ 
sion had no right to take into consideration in fix¬ 
ing a higher schedule the matters which induced 
it to make the order which it did. 

There are two questions which are presented to 
this court for decision: First. Are the reasons given 
by the Commission for the establishment of the 
schedule mentioned in the order valid, or are they 
so outside and beyond the power of the Commis¬ 
sion to fix a reasonable rate as to come within the 
rule that prohibits the Commission from fixing a 
rate for reasons which the Commission is not au¬ 
thorized to consider? (Southern Pacific Co. v. I. 
C. C., 219 XL S., 433.) Second. Is it shown, beyond 
reasonable question, by the present record that the 
schedule of rates contained in the order of the Com¬ 
mission complained of clearly violates the fifth 
amendment to the Constitution of the United States 
by taking the property of petitioners without due 
process of law or without just compensation if the 
taking is for a public purpose ? 

It seems to have been decided in the case of Board 
of Railroad Commissioners of the State of Kansas 
v. Symms Grocery Co . et at. (35 Pac., 217), that 
the shipper can not invoke these, constitutional pro¬ 
visions for the reason that he is not obliged to ship; 
that he may utilize the rate prescribed or he may 


CASES BROUGHT IN THE COMMERCE COURT. 185 

not. We are not impressed with the soundness of 
this decision. The logical result of such a holding 
as applied to the facts in the present case would 
be equivalent to saying to the shipper, “ You may 
pay an unconstitutional rate or go out of busi¬ 
ness and we do not think that the protection of 
the Constitution is held on any such condition. 

In stating the reasons which in the judgment of 
the Commission compelled it to take into account- 
in fixing the schedule of rates which it did other 
considerations and other railroads than the C., 1ST 
O. & T. P., we can do no better than to quote from 
the report of the Commission, as follows: 

“ The defendants also contend that these rates 
should be fixed not only with reference to the finan¬ 
cial results and the financial necessities of the Cin¬ 
cinnati, New Orleans & Texas Pacific Co., but also 
with reference to other companies whose rates are 
necessarily affected by these; otherwise stated the 
Commission should establish rates which are just 
and reasonable for the section in which they pre¬ 
vail ; if a particular company is so situated that it 
can make a handsome profit under such rates, that 
is the good fortune of that company just as it 
would be the misfortune of some other company if 
it could not show as favorable earnings. 

“ The rate from Cincinnati and Louisville to 
Chattanooga has been the same for the last 28 years. 
The distance is substantially the same, and this re¬ 
lation in rates will undoubtedly be maintained in 


186 CASES BROUGHT IN THE COMMERCE COURT. 

the future. Whatever reduction is made from Cin¬ 
cinnati will be met by corresponding reductions 
from other Ohio River crossings. Rates from 
Memphis to Chattanooga are lower by a fixed dif¬ 
ferential than from the Ohio River, and this relation 
would undoubtedly be preserved, and perhaps ought 
to be, since the distance is 300 miles as against 336 
miles from Cincinnati. 

“In the original case the Commission ordered 
reductions to many other points besides Chatta¬ 
nooga. While Chattanooga is the only southern 
point of destination referred to in these complaints, 
it is frankly stated that the purpose is to obtain a 
general reduction to this southeastern territory; 
and no reason is apparent why, if the Commission 
adheres to its former decision in case of Chatta¬ 
nooga, it ought not to do the same in case of other 
localities in this territory. It will be remembered 
that in 1905 certain reductions were made from the 
Ohio River to Atlanta without any corresponding 
reductions to Chattanooga. Originally, the same 
rate had been made to Atlanta from Louisville as 
was made from Baltimore. After the opening of 
the Cincinnati Southern this same rate was applied 
from Cincinnati to Atlanta, and the rate from Cin¬ 
cinnati to Chattanooga was constructed by using 
the same rate per mile, although the distance was 
shorter. At the present time the rate per mile is 
greater in case of Chattanooga than in case of 
Atlanta. The defendants say that the present rate 
is constructed upon the proper basis, and that the 



CASES BROUGHT IN THE COMMERCE COURT. 187 

reductions made to Atlanta could not be applied to 
Chattanooga without undoing what was accom¬ 
plished at that time, for the following reasons: 

“ The reductions of 1905 grew out of the claim 
upon the part of Atlanta that its rates from the 
north were too high in comparison with Birming¬ 
ham and Montgomery. By that readjustment 
Atlanta was made the same as Montgomery and the 
difference between Atlanta and Birmingham re¬ 
duced. 

‘ 4 The distance from Memphis to Birmingham is 
251 miles, from Memphis to Chattanooga 300 miles, 
from Cincinnati to Chattanooga 336 miles. The 
rate from Memphis to Chattanooga has always been 
somewhat less than that from Cincinnati, in recogni¬ 
tion of the shorter distance, and the St. Louis & San 
Francisco Railway insists that the rate from Mem¬ 
phis to Birmingham shall not materially exceed the 
rate from Memphis to Chattanooga, which seems 
reasonable in view of the fact that the distance is 
50 miles shorter. If, now, this rate from Cincin¬ 
nati to Chattanooga is reduced, that will in all prob¬ 
ability carry with it a reduction from Memphis to 
Chattanooga, which will involve a corresponding 
reduction from Memphis to Birmingham, and this 
will create the same discrimination out of which the 
reduction of 1905 came. This would mean a 
reopening of that contest. 

“ It must also be remembered that any reduction 
from the north to Atlanta and corresponding terri- 


188 CASES BROUGHT IN THE COMMERCE COURT. 

tory would undoubtedly be followed by similar 
reductions from the east as was the case in 1905. 

“ It is apparent, therefore, to make any consider¬ 
able change in this rate from Cincinnati to Chatta¬ 
nooga will work a lowering in rates throughout this 
entire southern territory, or will produce a change 
in the relation of those rates which now seem to be 
adjusted upon a basis fairly satisfactory to that 
territory. How far are we at liberty to consider 
all this in fixing a reasonable rate over the Cincin¬ 
nati, New Orleans & Texas Pacific? It should be 
noted that Chattanooga is not complaining of un¬ 
fair treatment as compared with other southern 
points. 

‘ 4 Some indignation was expressed by several wit¬ 
nesses upon the part of the city of Cincinnati 
because after that community had expended this 
enormous amount of money in the construction of 
the Cincinnati Southern Railroad, that property 
was not more devoted to the interests of the city of 
Cincinnati. If that city, under proper legislative 
authority, had seen fit to operate its railroad, it 
might have established to Chattanooga whatever 
rates it saw fit, and if the results of municipal oper¬ 
ation had been as favorable as the present, it could 
have materially reduced those rates and still ob¬ 
tained a fair return upon its investment. Such a 
reduction would have cheapened the cost of this 
freight to the dealer and probably in a degree to the 
consumer, and so might have benefited the ultimate 
consuming public. It is doubtful if it would have 



CASES BROUGHT IN THE COMMERCE COURT. 189 

benefited the interests of Cincinnati, since the rates 
established by it would have been met by carriers 
serving rival communities, and the relation of rates 
would have continued the same. However this may 
be, the city has parted with its right to operate this 
property, and the matter stands exactly as though 
this road had been built by private capital. 

“ In the Matter of Proposed Advances in Freight 
Rates (9 I. C. C. Rep., 382) the Commission, having 
under consideration the rates on grain from Chi¬ 
cago to the Atlantic seaboard, announced that the 
interests of all competing lines must be considered 
in determining the reasonableness of those rates, 
and not merely that line which could handle the 
business the cheapest. In the Spokane case (15 
I. C. C. Rep., 376) the same subject was considered 
and the same conclusion reached. The last affirm¬ 
ance of this doctrine is found in Kindel v. N. Y., 
N. H. & H. R. R. Co. (15 I. C. C. Rep., 555), in 
which the rule is stated by Clark, Commissioner, as 
follows: 

“ 4 In the Spokane case (15 I. C. C. Rep., 376) we 
held that the reasonableness of a rate between two 
points, served by two or more carriers, could not be 
determined by consideration alone of that line 
which is shortest and most favorably situated as to 
operation, earnings, etc., but that the entire situa¬ 
tion must be considered. * * * 

“ ‘ As before suggested, we can not, in determin¬ 
ing competitive rates, select that railroad which is 
the shortest or most advantageously situated and 


190 CASES BROUGHT IN THE COMMERCE COURT. 

limit the rate to what would allow that property 
fair earnings. We must consider the entire situa¬ 
tion and determine a reasonable rate not merely 
with reference to the Union Pacific, but with 
reference to all lines serving these Colorado points 
by reasonably direct lines. ’ 

“ We have no doubt as to the correctness of this 
principle and believe it must be applied here within 
proper limits. 

“ The Cincinnati Southern Railroad is a single 
trunk line without branches, running from Cincin¬ 
nati to Chattanooga. The main line of the Louis¬ 
ville & Nashville extends from Cincinnati to Louis¬ 
ville, and from Louisville to Nashville. Traffic 
from Louisville to Chattanooga passes through 
Nashville, and over the Nashville, Chattanooga & 
St, Louis to Chattanooga. For the year 1907 the 
gross earnings per mile of the Cincinnati Southern 
were, as already stated, over $26,000 per mile, those 
of the Louisville & Nashville about $11,000 per 
mile, and of the Nashville, Chattanooga & St. Louis 
less than $10,000 per mile. The same year the 
earnings of that portion of the line of the Louisville 
& Nashville between Cincinnati and Louisville were 
$25,000 per mile; between Louisville and Nashville 
$30,000 per mile; those of the Nashville, Chatta¬ 
nooga & St. Louis between Hickman and Chatta¬ 
nooga, a distance of 320 miles, over $20,000 per 
mile. Now, in adjusting the rates of the Louisville 
& Nashville, or the Nashville, Chattanooga & St. 
Louis, shall the Commission consider each section 



CASES BROUGHT IN THE COMMERCE COURT. 191 

of the road by itself, or shall it establish a common 
rate for the whole ? 

“ Commission rates are usually the same for all 
lines, both main line and branches. It is fair that 
the main line should in a degree contribute to the 
support of the branch line, for the branch-line busi¬ 
ness when it reaches the main line is surplus traffic, 
from which a larger profit is made. It is in the 
public interest that rates shall be so adjusted that 
population and industries may freely diffuse them 
selves. It hardly seems proper to fix the rates upon 
the Cincinnati Southern, which is really a main 
line, without any reference to the branch lines 
which contribute to it. 

“ This should be further borne in mind. Of the 
entire traffic handled by the Cincinnati, New Or¬ 
leans & Texas Pacific in the year 1907 over two- 
thirds of the tonnage was delivered to it by its con¬ 
nections and most of it hauled as a through trans¬ 
action from Cincinnati to Chattanooga or the re¬ 
verse. Comparatively little traffic originates upon 
this railroad between these two termini. The pres¬ 
ent large earnings may be due to the fact that the 
Southern Railway is able to turn onto this road 
large amounts of traffic which it would exchange 
with some other railroad but for its interest in the 
Cincinnati Southern. If the city of Cincinnati 
were operating this property itself, it is by no means 
certain that the apparently undue profits of to-dav 
might not be a deficit. 


192 CASES BROUGHT IN THE COMMERCE COURT. 

“ The complainants urge that the Cincinnati 
Southern is really a part of the Southern Railway 
system. If it were so considered the gross earn¬ 
ings per mile of the entire system would be less 
than those of either the Louisville & Nashville or 
the Nashville, Chattanooga & St. Louis. 

“ If these rates are to be established with refer¬ 
ence to other rates in the vicinity it becomes perti¬ 
nent to inquire how the present rates compare with 
other rates for similar distances in the South. Ex¬ 
tensive tables have been furnished by the defend¬ 
ants instituting such comparisons, and these tables 
have been to some extent criticized and replied to 
by the complainants. 

“ It fairly appears that the rates now in effect 
from Cincinnati to Chattanooga upon the numbered 
classes are lower than similar rates prescribed by 
the railroad commissions of most States in the 
South. They are as low and usually lower than 
the interstate rates made by southern roads for 
similar distances. 

“ The complainants call our attention to rates 
from Cincinnati to Nashville. The distance is 300 
miles and the rates are materially lower than those 
from Cincinnati to Chattanooga, being, first class, 
53 cents as against 76 cents, and sixth class, 23 
cents as against 30 cents. But this Commission has 
found (Chamber of Commerce of Chattanooga v. 
Southern By. Co 10 I. C. C. Rep., Ill), and the 
Federal courts have found (East Tenn., Va. & Go. 





CASES BEOUGHT IN THE COMMERCE COURT. 193 

Ry. Co. v. I. C. C., 181 U. S. 1), that water competi¬ 
tion influences these rates to Nashville. The rate 
from Cincinnati to an intermediate point where 
there is no water competition is higher in propor¬ 
tion to distance than those to Chattanooga. Thus 
the first-class rate from Cincinnati to Gallatin, 20 
miles north of Nashville, is 78 cents. 

“ The complainant also refers to rates from Vir¬ 
ginia cities to Atlanta which are less per ton-mile 
than those in question. But it is well understood 
that these rates are materially affected by water 
competition, and ordinarily the long-distance rate 
should be less per ton-mile than the rate for the 
shorter distance. If rates from Virginia cities 
south for distances of from 300 to 350 miles are ex¬ 
amined, it will be found that they usually equal or 
exceed the Chattanooga rates. 

“ The complainants urge that the volume of traf¬ 
fic in this territory has increased and is increasing, 
all of which should make for lower rates; and this 
is certainly true; but it must also be borne in mind 
that the cost of operation is advancing. In the past 
railways have been able to introduce various econo¬ 
mies in the handling of their business, which have 
tended to offset the added cost of labor and sup¬ 
plies, so that the net result has been that the in¬ 
crease in the cost of transporting a ton of freight 
1 mile has but slightly, if at all, increased. It is 
doubtful if in future similar economies can keep 
pace with advancing prices. 

48250—S. Doc. 789, 62-2-13 


194 CASES BROUGHT IN THE COMMERCE COURT. 

“ We hesitate at this time to make widespread 
and far-reaching* reductions in rates where there 
is no special occasion for it and where the rates 
themselves are not clearly excessive.” 

It appears from the findings of the Commission 
that it has always refused in the consideration of 
the reasonableness of a rate or rates to consider only 
the particular carrier making the same by itself, 
but on the contrary has always considered the rates 
in a particular territory or the rates of other car¬ 
riers to be affected by the change of the particular 
rate or rates in question; and we think it fair to say 
that so far as the Commission is concerned there has 
been a uniform policy, public policy if you please, 
because the Commission represents the United 
States in so far as it acts within the scope of its 
delegated authority in the establishment of reason¬ 
able and just rates, to the effect that it will not fix 
rates or determine their reasonableness solely upon 
a consideration of the particular carrier whose 
rates are directly involved. We think this court 
may take judicial knowledge of the fact that the 
interstate rates prescribed for the transportation of 
freight by common carriers must necessarily be more 
or less interdependent, or at least be so related to 
each other that the rate-making power will not, 
simply because it has the power, fix a rate upon a 
single line of railroads which will necessarily dis¬ 
organize established and reasonable rates on other 
railroads in the same territory. All rates estab¬ 
lished in accordance with law are presumed to be 


CASES BROUGHT IN THE COMMERCE COURT. 195 

just and reasonable. It is for this reason that the 
rates for the transportation of freight of other car¬ 
riers in the same territory may be looked into as 
evidence of what should be a just and reasonable 
rate, providing conditions are similar. We can not 
as a court not vested with the power to fix rates say, 
beyond question, that the elements which the Com¬ 
mission took into consideration in fixing the sched¬ 
ule complained of were improper for the Commis¬ 
sion to consider, and therefore can not conclude 
that the Commission based a schedule of rates upon 
improper grounds. 

It was said by the Supreme Court in Texas & 
Pacific Railway v. 7. C. C. (162 U. S., 233) — 

< 6 that the purpose of the act is to promote and 
facilitate commerce by the adoption of regulations 
to make charges for transportation just and reason¬ 
able, and to forbid undue and unreasonable prefer¬ 
ences or discriminations: that, in passing upon 
questions arising under the act, the tribunal ap¬ 
pointed to enforce its provisions, whether the Com¬ 
mission or the courts, is empowered to fully con¬ 
sider all the circumstances and conditions that 
reasonably apply to the situation, and that, in the 
exercise of its jurisdiction, the tribunal may and 
should consider the legitimate interests as well of 
the carrying companies as of the traders and ship¬ 
pers * * *” 

Under the second proposition we can not disturb 
the order of the Commission on the theory that it 


196 CASES BROUGHT IN THE COMMERCE COURT. 


fixed rates so high as to be violative of the fifth 
amendment to the Constitution, unless it shall 
clearly appear to us that the constitutional rights 
of the shippers were invaded thereby. The fixing 
of the schedule of rates complained of was a legisla¬ 
tive act. 

Munn v. Illinois, 96 U. S., 113. 

Peil v. Chicago N. W. By. Co., 94 U. S., 164. 

Express Cases, 117 IT. S., 1. 

C. M., etc., By. v. Minnesota, 134 U. S., 418. 

Beagan v. Farmers’ Loan & T. Go., 154 U. S., 362. 

St. L. & S. F. By. Co. v. Gill, 156 U. S., 649. 

G., N. 0. & T. P. By. Co. v. I. C. C., 162 IT. S., 184. 

T. & P. By. v. I. C. C., 162 IT. S., 197. 

I. C. C. v. Cincinnati By. Co., 167 U. S., 479. 

Bailroad Commission Cases, 116 U. S., 307. 

Smyth v. Ames, 169 IT. S., 515. 

Chord v. L. & N. B. B. Co., 183 U. S., 483. 

Alpers v. City of San Francisco, 32 Fed., 503. 

So. Pac. Co. v. B. B. Commissioners, 78 Fed., 236. 

New Orleans Water Works Co. v. Neiv Orleans, 
164 U. S., 471. 

Atlantic Coast Line v. North Carolina Corpora¬ 
tion Com., 206 IT. S., 1. 

And while we are of the opinion that our power 
to review the order of the Commission fixing a 
schedule of rates is co-extensive with the limits of 
the protecting shield of the Constitution, still it 
must clearly appear that such protection in some 
degree has been taken away. The Commission 



CASES BROUGHT IN THE COMMERCE COURT. 197 

found that the rates complained of were not clearly 
excessive. Much less are we able to find that the 
rates authorized by the Commission in the order 
complained of and which were a reduction of the 
former rates are clearly excessive. In making this 
statement we are fully aware of the allegation of 
the bill as to the net earnings of the C., N. O. & 
T. P., and the whole case as to the excessive feature 
of the rates fixed by the Commission is almost en¬ 
tirely based upon the earnings of the C., N. 0. & 
T. P. While earnings may be considered in the 
fixing of a reasonable rate to be charged by a car¬ 
rier for the transportation of freight, rates neces¬ 
sarily can not be based upon earnings alone. This 
is made clearly to appear when we consider that a 
just and reasonable rate is one which is just to the 
carrier and to the shipper. It is a rate which 
yields to the carrier a fair return upon the value of 
the property employed in the public service and it 
is a rate which is fair to the shipper for the service 
rendered; and when this rate is established if it 
results in large profits to the carrier the carrier is 
fortunate in its business, and if it results in a loss 
of earning power so that the business of the carrier 
is unprofitable the carrier is unfortunate. But 
the rate may not be lowered or raised merely upon 
the ground that the carrier is either making or 
losing money, providing always the rate is a reason¬ 
able and just rate. Indeed, it has been held that 
the earning power of the rate is one of the least 


198 CASES BROUGHT IN THE COMMERCE COURT. 


considerations in fixing a just and reasonable 
rate. 

Canada Northern E. E. Co. v. International 
Bridge Co., L. R. 8 App. Cases, 723. 

Board of Eailroad Comm. v. I. C. E. E. Co., 20 
I. C. C. Rep., 181. 

Being satisfied that the Commission did not err 
in taking into consideration the grounds they did 
in fixing their schedule of rates, and not being 
clearly satisfied that the rates themselves are so 
high as to violate the constitutional rights of the 
shippers, we are of the opinion that the bill must be 
dismissed. And it is so ordered. 

Arohbald, Judge, dissenting: 

There can be no serious question as to the con¬ 
clusion which would have been reached by the Com¬ 
mission had they confined themselves to the de¬ 
termination of what was a just and reasonable rate 
from Cincinnati to Chattanooga by the Cincinnati 
Southern, without regard to the effect upon other 
roads. This was gone into at length in 1894, and 
the 60-cent schedule, which is now contended for, 
sustained. ( Freight Bureau v. Cin., N. 0. & T. P. 
E. E., 6 Inter. Com. Com. Rep., 195.) But as the 
law then stood there was no authority in the Com¬ 
mission to fix future rates, and its action was there¬ 
fore held of no effect.. (Inter. Com. Com. v. Cin., 
N. 0. & T. P. E. E., 167 U. S., 479.) But even with 
the lapse of time and the change of conditions, the 
issue as is recognized by the Commission is the 
same, and the same conclusion would confessedly 


CASES BROUGHT' IN THE COMMERCE COURT. 199 

have been reached except as they were influenced 
by a regard for the necessities of other roads. “ If 
it is our duty,” says Commissioner Prouty in the 
report, “ to take this railroad by itself and to de¬ 
termine the reasonableness of these rates, by ref¬ 
erence to cost of construction, cost of maintenance, 
and profit upon the investment, we think the com¬ 
plainants have established their case, and that these 
rates ought fairly to be reduced by as great an 
amount as was formerly found reasonable by this 
Commission.” Unfortunately, however, for the 
complainants this view did not prevail. It was con¬ 
tended by the railroad company that the rates 
should be fixed not only with reference to the final 
results to itself and its own financial necessities, 
but also with reference to other companies, whose 
rates were necessarily affected thereby; or, in other 
words, that the Commission should establish rates 
which would be just and reasonable for the whole 
section of territory in issue, and that if a particular 
carrier was so situated that it could make a hand¬ 
some profit, it was to be recognized as a piece of 
good fortune with which the Commission was not 
to interfere. Adopting this view, which had also 
been followed in other cases (in re proposed ad¬ 
vance in freight rates, 9 Inter. Com. Com. Rep., 
382; Spokane v. North Pac. P. 7?., 15 Inter Com. 
Com. Rep., 376; Kindel v. New York, New Haven 
& Hartford R. R., 15 Inter. Com. Com. Rep., 555), 
it was accordingly held that the reasonableness of 
the rate between points served by two or more lines 


200 CASES BROUGHT IN THE COMMERCE COURT. 

could not be determined by reference to that line 
alone which was shortest and most favorably situ¬ 
ated with respect to operation and earnings, and 
the rate limited thereby; but that the entire situa¬ 
tion was to be considered, and a rate fixed which 
would be reasonable with respect to all the lines 
directly serving the points involved. That rates 
for similar distances on other lines similarly condi¬ 
tioned may be referred to, to assist in determining 
what is fair and reasonable in any case, is clear. 
And it is no doubt proper also to take into account 
the effect on rates upon freight moving to and from 
other points beyond those immediately in view. 
But that, in my judgment, is as far as it is permit¬ 
ted to go. There is no right, as I look at it, to con¬ 
sider the effect of the rate or rates to be established 
on those of other roads, between the same points, 
or to maintain such rates at a figure which is neces¬ 
sary to meet the needs of those roads. And so far 
as the order of the Commission was induced by any 
such idea, it can not be sustained. 

If the Cincinnati Southern was the only line 
from Cincinnati to Chattanooga, the rate, of course, 
so far as it was not a joint rate, would be fixed with 
reference to that road alone. And if it was a line 
that was costly to build, or that could not be eco¬ 
nomically run, this would operate to increase the 
rates, and the shipper would have to pay, to corre¬ 
spond. But, on the other hand, if the reverse of 
this was true, and the road was neither an expen¬ 
sive one to construct, maintain, or run, the shipper 




CASES BROUGHT IN THE COMMERCE COURT. 201 

would clearly be entitled to the benefit of these con¬ 
ditions and to the lower rates necessarily to ensue. 
So, also, if this favored road was the first in the 
field, and other roads had come in after it was built, 
it certainly would not be contended that with the 
introduction of new and additional facilities the 
lower rates prevailing on the more favored line 
could be raised to meet the necessities of others 
not so well placed. It is not to be thought of that 
the construction of a second or third road should 
be made the basis for higher rates. The standard 
would be that of the original and most favored line. 
But what difference does it make whether the road 
which can afford the best rate is the first or the last 
to be built ? It is the condition at the time the rate 
is fixed that controls. The shipper is entitled to 
the benefit of any advance in transportation facili¬ 
ties that may be made and is not to be tied down 
to the unprogressive and outdistanced past. The 
supposed advantage in competing lines between 
the same points becomes a detriment, if rates are 
to be kept up to help the weakest road. 

The Cincinnati Southern extends in a short and 
direct route due south from Cincinnati to Chatta¬ 
nooga without branches 336 miles. It was expen¬ 
sive to build, and the cost of operation and mainte¬ 
nance is high. But its net earnings are nevertheless 
large, amounting to some 44 per cent on the capital 
stock. The route between the same points by way 
of the Louisville & Nashville and the Nashville, 
Chattanooga & St. Louis roads is a third longer, or 


202 CASES BROUGHT IN THE COMMERCE COURT. 

450 miles, and both of these roads have more or less 
unremunerative branch lines. And yet the Com¬ 
mission have not only put the two routes on an 
equality, but have even considered the influence of 
unprofitable branches, which have to be taken care 
of, fixing a rate which shall be fair for the whole 
system, and not simply for the immediate section 
of road which is involved. This, in my judgment, 
they had no right to do. The shipper is entitled to 
a just and reasonable rate, having regard to the 
service which is to be rendered by the carrier that 
is to perform. And this service is largely to be 
measured by the facilities for economically render¬ 
ing it, which are possessed by that particular road. 
It is not to be augmented or kept up, beyond what 
is fair and just, by the consideration of what some 
other road, not so favorably situated, may need. 

The order of the Commission, being based upon 
mistaken and erroneous grounds, is therefore in¬ 
valid and should be so declared. ( Southern Rail¬ 
way v. St. Louis Hay & Grain Co., 214 IT. S., 297; 
Inter. Com. Coin. v. Stickney, 215 U. S., 98; South¬ 
ern Pacific Railway v. Inter. Com. Com., 219 U. S., 
833.) And the case should be thereup'™ remanded 
to the Commission in order that a rate may be fixed 
which shall be just and reasonable as respects the 
respondent carrier, by whom the services are to be 
performed. This does not take from the Commis¬ 
sion the right to say what that rate shall be. Much 
Jess does it involve the determination of the rate 


CASES BROUGHT IN THE COMMERCE COURT. 203 

by the Court. It merely disposes of the rate which 
has been mistakenly made, as preliminary to a new 
consideration of it by the Commission upon cor¬ 
rect and proper grounds. (Cin., N. 0. & T. P. R. R. 
v. Inter. Com. Com., 162 U. S., 184, 238, 239; South¬ 
ern Railway v. St. Louis Hay & Grain Co., 214 
U. S., 297.) 

I therefore dissent from the judgment of the 
court, sustaining the demurrer and dismissing the 
bill. 

Mack, Judge: 

I concur in the above dissent. 





United States Commerce Court. 


No. 6 . —May Session, 1911. 


The Eagle White Lead Co. et al., petitioners, 

v. 

Interstate Commerce Commission, and The Cin- 
cinnati. New Orleans & Texas Pacific Railway 
Co., respondents. 

United States, intervening respondent. 

Mr. Francis B. James , for the petitioners. 

Mr. James A. Fowler , Assistant to the Attorney 
General, and Mr. Blackburn Esterline , special 
assistant to the Attorney General, for the United 
States. 

Mr. P. J. Farrell , for the Interstate Commerce 
Commission. 

Mr. Frank W. Gwathmey and Mr. R. Walton 
Moore, with whom Mr. Edward Colston was on the 
brief, for the respondent carrier. 

Before Knapp, Presiding Judge, and Archbald, 
Hunt, Carland, and Mack, Judges. 

[July 20, 1911.] 

Carland, Judge: 

The bill in this case is, for all practical purposes, 
the same as the bill in case No. 5, Receivers and 

205 




206 CASES BROUGHT IN THE COMMERCE COURT. 

Shippers' Association of Cincinnati v. Interstate 
Commerce Commission and the Cincinnati, New 
Orleans & Texas Pacific Raihvay Co,, and was filed 
for the same purpose. The cases were submitted 
together upon bill and demurrer. 

For the reasons stated in the opinion filed in case 
No. 5, the demurrer in this case must be sustained 
and the bill dismissed. 

Akchbald and Mack, Judges, dissenting. 



United States Commerce Court. 


No. 7.— April Session, 1911. 


Atchison, Topeka & Santa Fe Railway Company 
et al., petitioners, 
v. 

Interstate Commerce Commission, respondent, 
The United States and Arlington Heights Fruit 
Company et ah, interveners. 


For opinion and order of the Interstate Com¬ 
merce Commission see 19 I. C. C. Rep., 148. 

Mr. Robert Dunlap, Mr. C. W. Durbrow , and 
Mr. H. A. Scandrett, with whom Mr. Gardiner 
Lathrop and Mr. T. J. Norton were on the brief, for 
the petitioners. 

Mr. Blackburn Esterline, special assistant to the 
Attorney General, with whom Mr. James A. Fow¬ 
ler, Assistant Attorney General, was on the brief, 
for the United States of America. 

Mr. William E. Lamb for the Interstate Com¬ 
merce Commission. 

Mr. Asa F. Call for the interveners. 

Before Knapp, Presiding Judge, and Archbald, 
Hunt, Carland, and Mack, Judges. 


207 





208 CASES BROUGHT IN THE COMMERCE COURT. 

[October 5, 1911.] 

Mack, Judge: 

The complaint made to the Interstate Com¬ 
merce Commission by shippers that the carload 
rate of $1.15 per hundred pounds for oranges and 
lemons from California and other western points to 
the East prescribed by the railroads was unreason¬ 
ably high, was dismissed by the commission as 
to oranges, but sustained as to lemons. These 
rates are so-called “blanket rates/ 7 covering trans¬ 
portation to practically the entire territory east of 
the Rocky Mountains, including New England. 
The rate for oranges had originally been $1.25 per 
hundred, but had been voluntarily reduced by the 
railroads in 1907 to $1.15, the present rate; while 
the rate for lemons from 1902 on had fluctuated 
between $1.25 and $1 per hundred, having been 
several times reduced to the latter figure and 
again advanced to the former; except for a brief 
interval, it was allowed to stand at $1 per hundred 
from January, 1904, to November, 1909, when it 
was advanced to $1.15, the same as on oranges. 
This is the rate now complained of. By the action 
of the commission the $1.15 rate on oranges was left 
undisturbed, but the rate on lemons was reduced to 
$1, the rate so fixed being conditioned on the same 
requirements with regard to minimum weights that 
had theretofore prevailed, and being extended 
without change to the same territory blanketed. 
So much of the complaint as had reference to the 
additional precooling and refrigerating charges 









CASES BROUGHT IN THE COMMERCE COURT. 209 

was held by the commission for further advisement 
and is not included in this proceeding. This case 
to enjoin the enforcement of the order prescribing 
the $1 lemon rate, was begun by bill filed in the 
Circuit Court of the United States for the District 
of Kansas. It was subsequently transferred to this 
court, and is now up for final disposition on the bill, 
answers, and testimony taken. 

The first and decisive ground of attack is that the 
order “ is without the scope of the delegated author¬ 
ity under which it purports to have been made” 
(/. C. C. v. III. Centr. R. R. Co., 215 U. S., 452, at 
470) in this, that while in form holding the $1.15 
rate unreasonable and prescribing the $1 rate as 
reasonable, in substance the commission did not de¬ 
termine the intrinsic reasonableness of either rate, 
but reduced the rate prescribed by the railroads in 
order that, and to a point at which, in its judgment, 
the California growers might successfully compete 
with their Sicilian competitors in a broader market 
than would otherwise be possible; in other words, 
that the commission acted upon the erroneous as¬ 
sumption that it had the power and the right, if not 
the duty, so to adjust railroad rates as would give to 
the American industry protection against foreign 
competition. 

If complainants are right in their contention, the 
invalidity of the order necessarily follows. This has 
been clearly established by the decision rendered 
since the order herein was made in Southern Pacific 
Co. v. Interstate Commerce Commission (219 U. S., 

48250—S. Doc. 789, G2-2-14 


210 CASES BROUGHT IN THE COMMERCE COURT. 


433) reversing the decree of the Circuit Court and 
annulling an order of the commission, which had 
reduced a $5 lumber rate advanced from $3.10, the 
rate in force for over 10 years, to $3.40 and $3.65, 
respectively. 

Chief Justice White, voicing the unanimous opinion 
of the Supreme Court, thus enunciated the principles 
which it is urged are controlling in the present case: 

“ The contention is that although the order 
made by the commission may have been 
couched in form which would cause it, super¬ 
ficially considered, to appear to be but the 
exercise of an authority to correct an un¬ 
reasonable rate, yet if it plainly results from 
the record that the order of the commission 
was not the exercise of such an authority, but 
based upon the assumption by that body of 
the possession of a power not conferred by 
law, the mere form given by the commission 
to its action does not relieve the courts from 
the duty of reviewing and correcting an 
abuse of power. Applying these proposi¬ 
tions, the insistence is that both in form and 
in substance the order of the commission is 
void, because it manifests that that body did 
not merely exert the power conferred by law 
to correct an unjust and unreasonable rate, 
but that it made the order which is com¬ 
plained of upon the theory that the power 
was possessed to set aside a just and reason¬ 
able rate lawfully fixed by a railroad when¬ 
ever the commission deemed that it would 
be equitable to shippers in a particular dis¬ 
trict to put in force a reduced rate. That is 



CASES BROUGHT IN THE COMMERCE COURT. 211 


to say, the contention is that the order en¬ 
tered by the commission shows on its face 
that that body assumed that it had power not 
merely to prevent the charging of unjust and 
unreasonable rates, but also to regulate and 
control the general policy of the owners of 
railroads as to fixing rates, and consequently 
that there was authority to substitute for a 
just and reasonable rate one which in and of 
itself in a legal sense might be unjust and 
unreasonable, if the commission was satis¬ 
fied that it was a wise policy to do so, or 
because a railroad had so conducted itself as 
to be estopped in the future from being enti¬ 
tled to receive a just and reasonable com¬ 
pensation for services rendered. On the 
other hand, the commission in the argument 
at bar does not contend that it possessed the 
indeed abnormal and extraordinary power 
which the railroads thus say was exerted. 
* * * While it is not denied on behalf of 
the commission that that body may have con¬ 
sidered the prior rate prevailing in the Wil¬ 
lamette Valley, the period during which it 
had been in force, and the effect upon the 
business situation in the valley of a change 
to a higher charge, all these things, it is in¬ 
sisted, were not made the basis of the power 
exerted, but were simply taken into consid¬ 
eration as some of the elements proper to be 
considered in the ultimate exertion of the 
lawful power to forbid an unjust and unrea¬ 
sonable rate and fix a reasonable one. 

It is clear, therefore, as we have said at 
the outset, that the result of the contentions 


212 CASES BROUGHT IN THE COMMERCE COURT. 


and concessions of the respective parties is 
to reduce the controversy to a single issue, 
which is, What was the nature and character 
of the order made by the commission? That 
is, What, in substance, was the power which 
the commission exerted in making the order? 

• Coming to the consideration of that sub¬ 
ject, we are of the opinion that the court 
below erred in not restraining the enforce¬ 
ment of the order complained of, because we 
see no escape from the conclusion that the 
order was void because it was made in con¬ 
sequence of the assumption by the commis¬ 
sion that it possessed the extreme powers 
which the railroad companies insist the order 
plainly manifests. 

After reviewing some of the testimony taken 
before the commission and its report, he concluded 
as follows: 

“ While it is true that the opinion of the 
commission may contain some sentences 
which, when segregated from their context, 
may give some support to the contention that 
the order was based upon a consideration 
merely of the intrinsic unreasonableness of 
the rate which was condemned, we think 
when the opinion is considered as a whole in 
the light of the condition of the record to 
which we have referred it clearly results that 
it was based upon the belief by the commis¬ 
sion that it had the right under the law to 
protect the lumber interests of the Willa¬ 
mette Valley from the consequences which 
it deemed would arise from a change of the 





CASES BROUGHT IN THE COMMERCE COTJET. 213 

rate, even if that change was from an unrea¬ 
sonably low rate which had prevailed for 
some time to a just and reasonable charge 
for the services rendered for the future.” 

As early as 1896, when the commission had no 
power to prescribe future rates, the Supreme Court 
said in T. & P. Ry. Co. v. I. C. C. (162 U. S., 197), 
at page 221: 

“Our reading of the act does not disclose 
any purpose or intention on the part of Con¬ 
gress to thereby reenforce the provisions of 
the tariff laws. These laws differ wholly in 
their objects from the law to regulate com¬ 
merce. Their main purpose is to collect 
revenues with which to meet the expenditures 
of the Government, and those of their pro¬ 
visions whereby Congress seeks to so adjust 
rates as to protect American manufacturers 
and producers from competition by foreign 
low-priced labor operate equally in all parts 
of the country.” 

Whatever, therefore, the rights of the carriers 
may be to give reduced rates for the purpose of 
fostering a new or an established industry or for 
granting to it a higher measure of protection against 
foreign competition than Congress, through the 
revenue laws, has given it, no such power can law¬ 
fully be exercised by the commission. 

The authority granted it under section 15 of the 
act to regulate commerce, to prescribe reasonable 
rates when it shall be of the opinion that the rates 
fixed by the carrier are unreasonable, does not con- 


214 CASES BROUGHT IN THE COMMERCE COURT. 


fer absolute or arbitrary power to act on any con¬ 
siderations which the commission may deem best 
for the public, the shipper, and the carrier. Its 
order must be based on transportation considera¬ 
tions. While it may give weight to all factors bear¬ 
ing either on the cost or the value of the transporta¬ 
tion services, it must disregard as well the demand 
of the shipper for protection from legitimate com¬ 
petition, domestic or foreign, for unlimited markets, 
or for the enforcement of equitable estoppels arising 
from a justifiable expectation that past rates will be 
maintained, as the demand of the carrier for the 
maximum rate under which the traffic will move 
freely. 

An examination of the report of the commission, 
reproduced so far as it bears on the lemon rate, in 
its entirety 1 demonstrates that except for two brief 


1 “The world’s supply of lemons is mainly produced in two localities, Sicily 
and southern California. In the year 1909 Sicily shipped 69,000 carloads, 
southern California 6,000 carloads. The United States consumed approxi¬ 
mately 12,000 carloads, of which one-half were of foreign growth. 

The cost of producing lemons in Sicily is much less than in California. 
Labor enters largely into the cost of production. The laborer in the Sicilian 
grove receives from 40 to 60 cents per day, while in California he is paid 
from $1.75 to $2 per day, and the difference in wage is even greater in case 
of the laborer employed about the packing houses. 

A box of lemons weighs 84 pounds. To transport that box from the 
Sicilian grove to the dock in New York costs from 30 to 35 cents. From 
New York to Chicago the rate is now 40 cents per hundred pounds, or 
33.6 cents per box, and this is substantially the rate which has prevailed 
in the past. In 1901 the rate from California to all eastern points was $1.25 
per 100 pounds, or $1.05 per box. It will be seen, therefore, that both in 
cost of production and in cost of transportation the Sicilian grower had a 
great advantage in all territory east of the Missouri River, which was the 
main consuming territory of the United States. A protective duty of $1 
per 100 pounds had been fixed upon the Sicilian lemon, but even with that 
assistance the American grower was unable to successfully compete. In 
the years 1901 and 1902 California supplied but about one-fifth of the 
demand in the United States. 

The growers in California applied to the carriers for a rate of transporta- 
ion which would enable them to meet the Sicilian lemon in eastern markets. 
They asked for a rate of $1 to the Middle West and of 75 cents to the Atlantic 
seaboard, the rate then being $1.25 to all this territory. The carriers con 




CASES BROUGHT IN THE COMMERCE COURT. 215 


paragraphs suggesting grounds for lowering the 
lemon while maintaining the orange rate, it deals 
entirely with matters tending to show the need in 
this industry of a high-protective tariff against 
Sicily and, not on traffic considerations, but to com¬ 
pensate for the tariff insufficiencies, a low trans¬ 
portation rate especially to eastern territory. 

ceded in the winter of 1902 what was termed a “relief” rate of $1 per 100 
pounds to all territory, and that rate was renewed in the winter of 1903. 

In 1903 the general freight agent of the Santa Fe lines upon the Pacific 
coast wrote to his superior traffic officer upon this subject as follows: 

“There is no doubt in my mind that if the California lemon growers do 
not see more encouragement in the future they are going to—a good many 
of them—let their orchards go back. 

“It seems to me that we will have to make the rate $1 per 100 pounds 
apply all the year, and give the lemon growers to understand that we will 
continue it in effect until they secure United States markets. * * * I 
think we can defend the lower rate on lemons on account of the competition 
of foreign lemons. * * * It is up to us now to give the lemon grower a 
definite answer as to what he may expect for years to come.” 

In fact in 1904 the $1 rate was made applicable for the entire year, and 
was continued in effect until November and December, 1909, when tariffs 
were filed advancing the rate to $1.15. 

The testimony in this case indicates and fairly shows that the cost of 
placing lemons upon the cars in California is no less, but is rather greater 
to-day than in 1904. The lemon growers assert that the increase in their 
production has been due mainly to the lower rate of freight under which 
they were better able to meet Sicilian competition. 

But even with the $1 rate California has been unable to compete with 
Sicily upon the Atlantic seaboard. The average price received by Cali¬ 
fornia growers east of the Allegheny Mountains is $1 per box less than the 
price obtained west of the Missouri River. 

The last tariff act increased the duty on lemons from $1 to $1.50 per 100 
pounds. The complainants assert and the defendants deny that this was 
the occasion for the increase in the freight rate. 

The average cost to the defendant of handling lemons is somewhat less 
than with oranges, for the reason that the average haul is shorter. As just 
noted, few lemons from California find a market upon the Atlantic sea¬ 
board, while practically the entire supply in territory west of the Mis¬ 
souri River is from that source. Oranges, upon the other hand, move in 
large quantities to these far eastern markets. The complainants insisted 
that the average haul in case of oranges was 500 miles greater than in case 
of lemons, and manifestly it is considerably in excess. 

The expense of moving citrus fruit under refrigeration is greater than 
under ventilation, since the weight of the ice is added to the load of the car, 
and the proportion of oranges moving under refrigeration is greater than 
of lemons. 

Upon the other hand, oranges load somewhat heavier than lemons, the 
present minimum being 27,600 pounds in case of oranges and 27,200 pounds 
m case of lemons. 

Upon full consideration we are of the opinion that the present lemon 
rate of $1.15 is unreasonable, and that the rate ought not to exceed $1 per 
100 pounds, with the present minimum weight, said rate to apply to all 
territory to which the rate of $1.15 is made applicable by the tariff of the 
defendants on file. 





216 CASES BROUGHT IN THE COMMERCE COURT. 

The only transportation considerations stated by 
the commission as a justification for their order 
reducing the lemon, while refusing to reduce the 
orange, rate from $1.15 to $1 are: First, that the 
average length of haul, and therefore the average 
cost, is less for lemons than for oranges; and, second, 
that lemons are ordinarily carried under ventilation, 
while oranges are ordinarily carried under the more 
expensive refrigeration. As an offset, in part at least, 
the minimum carload weight prescribed for oranges 
is, as stated, higher than for lemons. 

Inasmuch, however, as any additional cost due 
to refrigeration is the subject of a special refrigera¬ 
tion charge, it is obvious that this can not be con¬ 
sidered as an element in the transportation rate. 

While the difference of less than 500 miles in the 
length of the average haul of lemons and oranges is 
a fair transportation factor to be considered in pre¬ 
scribing blanket rates for both products, it is ap¬ 
parent from the report that this was but a small, 
if not an entirely insignificant factor in this case, 
especially as the increase of 50 per cent in the pro¬ 
tective tariff on lemons was expected by all the 
parties to widen the market for the California 
lemon growers and thus to increase the average 
length of the lemon haul. 

As in our judgment the order is based primarily 
on the assumed authority to protect the industry 
against foreign competition, it must be held void 
as beyond the powers delegated to the commission. 
This conclusion renders it unnecessary to deter- 


CASES BROUGHT IN THE COMMERCE COURT. 217 

mine whether, under the evidence, the rate of $1 
is confiscatory, or whether the commission is em¬ 
powered to prescribe blanket rates either generally 
or subject to the limitation that the rate between 
the most distant points must be at least nonconfis¬ 
catory. 

A permanent injunction will be granted restrain¬ 
ing the enforcement of the order as to the rate on 
lemons, without prejudice to a reopening and recon¬ 
sideration by the commission of the original pro¬ 
ceedings before it or of any further complaint in 
respect to the $1.15 rate, now disposed of. 


























United States Commerce Court. 


No. 9.— May Session, 1911. 


The Procter & Gamble Co., petitioners, 

v. 

United States et al., respondents. 
Interstate Commerce Commission, intervening 

RESPONDENT. 


ON FINAL HEARING. 

For opinion of Interstate Commerce Commis¬ 
sion, see 19 Inter. Com. Com. Rep., 556. 

Mr. George H. Warrington , for the petitioner. 

Mr. James A. Fowler, Assistant to the Attorney 
General, and Mr. Blackburn Esterline, special 
assistant to the Attorney General, for the United 
States. 

Mr. P. J. Farrell, for the Interstate. Commerce 
Commission. 

Mr. Edward Barton, with whom Mr. M. B. Waite 
was on the brief, and Mr. R. Walton Moore , for the 
respondent carriers. 

^ 219 





220 CASES BROUGHT IN THE COMMERCE COURT. 

Before Knapp, Presiding Judge, and Archbald, 
Hunt, Oakland, and Mack, Judges. 

[July 20, 1911.] 

Archbald, Judge: 

The Procter & Gamble Co., the petitioner, is en¬ 
gaged in the manufacture of soap, and the refining 
of cottonseed and other oils, and owns large indus¬ 
trial establishments at Ivorydale, Ohio, Port Ivory, 
N. Y., and Kansas City, Kans. In all its plants it 
has and maintains private railroad tracks, for the 
purpose of receiving cars from the interchange 
tracks which connect it with the respondent rail¬ 
roads. At two of the places named it owns and 
employs its own locomotives and itself performs the 
entire switching of cars, and at the other, the 
switching is performed by the railroads under con¬ 
tract, which is paid for separate and apart from 
the transportation charges. In every instance the 
tracks are owned by the company, are on its own 
land, and the railroads have no interest or control 
over them. 

The Procter & Gamble Co. is also the owner of 
532 oil-tank cars, which it has purchased at a cost 
of about $500,000. These cars are necessary for the 
transportation of the oils, grease, and other like 
commodities used by the company in its business, 
and were purchased by it in relief of the railroads, 
which were and are not prepared to furnish them. 
These tank cars, when loaded by the petitioner at 
its several establishments, are tendered to the con- 




CASES BROUGHT IN THE COMMERCE COURT. 221 

necting railroads for shipment, and are hauled to 
their various destinations at the regular published 
rates for the respective commodities with which 
they are loaded. The use of these cars is confined 
to the petitioner’s business, and in consideration of 
the petitioner’s furnishing them an allowance is 
made by the railroads of three-quarters of a cent a 
mile per car for each mile that it is hauled, this 
allowance being in accordance with the published 
tariffs of the railroads with respect to the movement 
of all private tank cars. 

Until the adoption of the rule set forth below, no 
demurrage was ever charged by any of the respond¬ 
ent railroads for delay in unloading private tank 
cars while standing on the private tracks of the 
owner. But beginning in February, 1910, and fol¬ 
lowing that, the railroads have published, as part 
of their so-called “ uniform demurrage code,” the 
following rule, which is the subject of this contro¬ 
versy : 

“ Private cars while in railroad service, whether 
on the carrier’s or private tracks, are subject to 
these demurrage rules to the same extent as cars of 
railroad ownership. 

“ Empty private cars are in railroad service 
from the time they are placed by the carrier for 
loading, or tendered for loading on the orders of 
the shipper. 

“ Private cars under lading are in railroad serv¬ 
ice until the lading is removed and the cars are 
regularly released. 


222 CASES BROUGHT IN THE COMMERCE COURT. 

“ Cars which belong to an industry performing 
its own switching service are in railroad service 
from the time they are placed by the industry upon 
designated interchange tracks, and thereby ten¬ 
dered to the carrier for movement. If such cars 
are subsequently returned empty, they are out of 
service when withdrawn by the industry from the 
interchange; if returned under load, railroad 
service is not at an end until the lading is duly 
removed.” 

The demurrage rules, of which this is a part, were 
prepared by a committee of the National Associa¬ 
tion of Railway Commissioners, composed of a rep¬ 
resentative from each State having a railroad com¬ 
mission and a member of the Interstate Commerce 
Commission; and were adopted by the association 
in convention and later approved, although not pre¬ 
scribed, by the Interstate Commerce Commission. 

After the publication of the rule in controversy, 
but before it had gone into effect, the Procter & 
Gamble Co. made complaint to the Interstate Com¬ 
merce Commission, and sought to have the rule set 
aside, in so far as it permitted the railroads to 
make a demurrage charge against the private cars 
of the company after they had been delivered to it 
and were standing on its own private tracks. But 
after a due hearing the Commission dismissed the 
complaint, and the respondent railroads are now 
exacting demurrage charges in accordance with the 
provisions of the rule. 



CASES BROUGHT IN THE COMMERCE COURT. 223 

The proceedings in this court are brought to set 
aside the order of the Commission dismissing the 
complaint and refusing relief, the allegation being 
made that the rule, in so far as it provides that pri¬ 
vately owned cars under lading on private tracks 
are in railroad service, and so subject to a demur¬ 
rage charge until the lading is removed, is unjust 
and unreasonable and deprives the company of the 
right to use its private cars on its private tracks 
for its own purposes unless demurrage is paid 
therefor, thereby permitting the respondent rail¬ 
roads to deprive the company of its property with¬ 
out due process of law, in violation of the fifth 
amendment to the Constitution and the acts regulat¬ 
ing interstate commerce. The prayer of the peti¬ 
tion is that the order of the Commission dismissing 
the complaint may be annulled and the respond¬ 
ent railroads enjoined from collecting the demur¬ 
rage charge, and that they may be further required 
to repay to the petitioner the sums which they have 
wrongfully collected from it under the rule. 

The United States moves to dismiss the petition 
on the ground.that this court has no jurisdiction in 
the premises; or that, if it has, no cause of action is 
made out which entitles the petitioner to relief. 
And in this motion the Interstate Commerce Com¬ 
mission and the several railroads which have been 
summoned as respondents, join. 

The jurisdiction of this court is denied on the 
ground that the petitioner is a shipper, and the In¬ 
terstate Commerce Commission having merely dis- 


224 CASES BROUGHT IN THE COMMERCE COURT. 

missed the complaint which was made to it, and 
granted no affirmative relief, that there is nothing 
in the order of dismissal which it entered that af¬ 
fords any basis for action here. Or, in other words, 
that it is only the carrier against which an order is 
made in favor of the shipper that can bring the 
case for review into this court, the shipper being 
concluded by the action of the commission, what¬ 
ever it may chance to be. This is a serious ques¬ 
tion, which merits careful consideration and is not 
altogether easy to solve. 

By the act by which the Commerce Court was 
created (act June 18, 1910; 36 Stat., 539), it was 
given “ the jurisdiction now possessed by circuit 
courts of the United States and the judges there¬ 
of •’ of, inter alia, “ cases brought to enjoin, set 
aside, annul, or suspend in whole or in part any 
order of the Interstate Commerce Commission. ’ ’ It 
was also therein further provided that ‘ ‘ in all cases 
within its jurisdiction the Commerce Court and 
each of the judges assigned thereto shall respec¬ 
tively have and may exercise any and all the powers 
of a circuit court of the United States, and of the 
judges of said court respectively, so far as the same 
may be appropriate to the effective exercise of the 
jurisdiction hereby conferred; ” and, conversely, 
that nothing in the act should be construed as en¬ 
larging the jurisdiction at the time possessed by 
said circuit courts, or the judges thereof, thereby 
transferred to and vested in the Commerce Court ; 
the jurisdiction, however, so far as conferred, to be 



CASES BROUGHT IN THE COMMERCE COURT. 225 

exclusive, and so far as not conferred being re¬ 
served. The question, then, is whether upon any 
recognized ground of equity practice the present 
petitioner, under the law as it previously stood, 
would have had the right to apply by bill to a circuit 
court of the United States to set aside the action of 
the Interstate Commerce Commission dismissing its 
complaint, and to enjoin the enforcement by the 
railroads of the demurrage charge which in effect 
was thereby approved. 

It is of no significance in this connection, nor of 
any assistance in the solution of the question, that 
suits in this court to enjoin, set aside, annul, or sus¬ 
pend any order of the Commission are required to 
be brought against the United States. It is just as 
consistent that the United States should be the re¬ 
spondent in cases brought for this purpose by the 
shipper as in cases brought by the carrier, the Gov¬ 
ernment in each case standing for the order of the 
commission which it is thus appointed to justify 
and defend. 

Neither does it detract from the jurisdiction of 
this court that, under the law as it previously stood, 
the venue of suits brought in the circuit courts of the 
United States against the Commission to set aside 
its orders was fixed in each case in the district where 
the carrier against which the order was made had 
its principal operating office, jurisdiction to hear 
and determine such suits being in terms vested in 
Ihe courts of such district. (Act June 29,1906, see. 
16, 34 Stat., 592.) This was a favor to the carrier 

48250—S. Doc 789, 62-2--15 


226 CASES BROUGHT IN' THE COMMERCE COURT. 

adversely affected by the order. And according to 
the law at the time, the commission being the re¬ 
spondent, provision had to be made for jurisdiction 
over it by the courts of the various districts 
throughout the country where it was liable to be 
summoned. It was to meet this situation that juris¬ 
diction was given in terms over suits of the char¬ 
acter mentioned to the courts of the district where 
the carrier against which the order was made had its 
principal office. Nothing more was intended, and 
nothing more is to be made out of this provision of 
the law. Certainly nothing adverse to possible suits 
by others than the carrier is to be thereby implied. 

The real argument against the right of suit, 
where the complaint of a shipper has been dis¬ 
missed, is that the denial of relief by the commis¬ 
sion is not an order of which the courts can lay hold. 
Such an order, it is urged, must be one specifically 
requiring that something shall or shall not be done 
before this is the case. In Peavey v. Union Pacific 
Railroad (176 Fed., 409) it is said: 

‘ ‘ A careful search of the interstate commerce 
act discloses no limitation of the parties who may 
maintain suits to enjoin, set aside, annul, or sus¬ 
pend an order of the commission, to those who were 
parties to the proceedings before it, upon which the 
order was based. The proceeding in court is not an 
appeal; it is a plenary suit in equity. * * * The 
determination of the question, what parties may 
maintain such suits is left by the * * * act to the 
general rules and practice in equity, and under 


CASES BROUGHT IN THE COMMERCE COURT. 227 

them any party whose rights or property are in 
danger of irreparable injury from an unauthorized 
order of the commission may appeal to a Federal 
court of equity for relief.’ 7 

But there was an order of the Commission in that 
case which prohibited the railroads from paying to 
complainants, and others who were owners of ele¬ 
vators located upon their lines, any compensation 
for the elevation of grain in transit, so that the law 
was unquestionably met so far as there being an 
order is concerned; and the case therefore decided 
nothing more than that the right to resort to the 
courts, is not confined to the carrier, but extends to 
everyone injuriously affected by the order of the 
Commission, even though not a party to the pro¬ 
ceedings before it in which the order was made. To 
that extent, but no further, it is pertinent here. 
Putting aside, however, for the moment the pro¬ 
visions of the statute, and considering the case as 
though it had not been passed, it is clear that a 
shipper would have been entitled, in one form or 
another, to redress in court against an unjust and 
unlawful charge or practice imposed by a carrier, 
such as the one here is alleged to be. And it would 
have been permissible therefore for the Procter & 
Gamble Co., denying the right of the carrier to 
make this demurrage charge, to have refused to pay 
it and compel the carriers to bring suit therefor; 
or, in view of the complications to which this would 
give rise, to say nothing of the multiplicity of suits 


228 CASES BROUGHT IN THE COMMERCE COURT. 

with different carriers which would be likely to 
ensue, and in order to settle the matter as to all 
parties once for all, it would have had the un¬ 
doubted right to go into a court of equity by bill 
and have the legality of the practice tested, and, if 
found to be unjustified, enjoined. ( Donovan v. 
Pennsylvania Co., 199 U. S., 279.) Indeed, the 
only question would seem to be whether this was 
not the course which the company, even considering 
the provisions of the statute, was required to pur¬ 
sue, the legality of the demurrage charge being the 
only thing involved, and that being a matter for 
the courts and not for the commission to decide. 
{Hite v. Central Railroad of New Jersey, 171 Fed., 
370. See also JDanciger v. Wells Fargo & Co., 154 
Fed., 379, and Langdon v. Pennsylvania R. R., 186 
Fed., 237.) It was decided, however, in Texas & 
Pacific Railway Co. v. Abilene Cotton Oil Co. (204 
U. S., 426) that redress by a carrier against an un¬ 
just and unreasonable rate must be sought in the 
first instance by proceedings before the Commis¬ 
sion, and that only after that could an action be 
maintained against the carrier for reparation based 
on the result. This conclusion was reached, and 
the common law right of action otherwise existing 
held to be abrogated by implication, in view of the 
system established by the enactments with regard 
to rate regulation by the Interstate Commerce 
Commission, and as necessary to the efficiency of 
that system, which otherwise would be subverted 
and made nugatory. And this was repeated in 



CASES BROUGHT IN THE COMMERCE COURT. 229 

Baltimore & Ohio Railroad v. Pitcairn Coal Co. 
(215 U. S., 481), where it was held that, for the cor¬ 
rection of an unequal distribution of cars, a shipper 
was similarly required to go to the Commission, and 
could not in advance of its action seek to remedy by 
mandamus the discrimination alleged. And Mor- 
risdale Coal Co. v. Pennsylvania Railroad (183 
Fed., 929) also is to the same effect. But if that be 
so, there can be no serious question as to the pro¬ 
priety, if not the necessity, for the present peti¬ 
tioner going first to the Commission to have deter¬ 
mined whether the demurrage charge in contro¬ 
versy was a just and reasonable requirement. And 
it can not be that the implication by which this is 
brought about is to be carried so far as to make the 
action of the Commission conclusive where relief is 
denied. There is no such compelling necessity in 
order to save the system; nor is the statute to be 
construed as requiring exclusive resort to a tribunal 
where the rights of the party can be only partially 
determined at the sacrifice of other rights which the 
courts of the land are appointed to consider and de¬ 
fend. This is not to deny that in questions of fact, 
or where judgment or expediency, is involved, the 
action of the Commission in denying relief, the 
same as in granting it, may not be final. But 
where, as here, it is not the amount that is in dis¬ 
pute—$1 a day per car being recognized as reason¬ 
able if there is to be any charge—but the right of 
the carrier, under the circumstances, to make any 
charge at all, it is not to be implied, unless there is 


230 CASES BROUGHT IN THE COMMERCE COURT. 

no escape from it, that the decision of the Commis¬ 
sion adverse to the shipper is to foreclose the ques¬ 
tion. And while the dismissal of a complaint by 
the Commission in a case like the present one may 
not in strictness be an order, in that it does not re¬ 
quire or prohibit that anything shall or shall not 
be done, it is so in substance and effect, in that, by 
refusing to interfere with the practice or the charge 
complained of, it virtually approves it and makes 
it operative. If it was required by the act to hold 
that a court could not interfere with such an order 
however confiscatory to the shipper it might be, the 
shipper being thus without legal redress, the act 
might well be declared unconstitutional as wanting 
in due process of law. 

The action of the Commission, if to be given any 
force, having thus the effect of an adverse decision 
with respect to the question involved, must be re¬ 
garded, even though negative in character, as an 
order within the meaning of the statute, which the 
courts may enjoin or set aside if legal or equitable 
grounds for doing so are found to exist. The peti¬ 
tioner therefore correctly came into this Court, as 
it could previously have gone into a Circuit Court 
of the United States—the requisite amount being 
involved and the case being one arising under the 
Federal law—to have the action of the Commission 
dismissing its complaint set aside and the demur¬ 
rage charge disallowed, if that should be the con¬ 
clusion reached with regard to it, either by direct 



CASES BROUGHT IN THE COMMERCE COURT. 231 

^decree or by remanding the case to the Commission 
with directions to sustain the complaint. 

But while the jurisdiction of this Court in the 
premises is thus sustained, we are forced to con¬ 
clude, upon a consideration of the merits, that the 
demurrage charge in controversy was lawfully im¬ 
posed, and that the petitioner therefore has no just 
ground for complaint. The argument against the 
charge proceeds upon a misconception. Baldly 
put, as an exaction for the use by the shipper of 
his own cars while standing on his own private 
tracks, the right to it might well be questioned. 
Neither is it to be sustained as compensation to 
the carrier for an additional service not covered by 
the transportation charge, that is to say, for the 
storage of the freight with which the cars are 
loaded, that storage being in the cars and on the 
tracks of the shipper and not in or on anything 
which the carrier has supplied. (In re Demurrage 
on Private Tank Cars, 13 Inter. Com. Com. Rep., 
378, 381.) It is difficult also to see how the imposi¬ 
tion of demurrage on private cars for delay in un¬ 
loading is necessary to prevent unjust discrimina¬ 
tion, the shipper who is able to provide such cars 
having an advantage over those who can not, which 
this regulation is supposed to correct. The ability 
to own private cars is a mere matter of capital 
which the undue withholding or the prompt un¬ 
loading and releasing of them can hardly affect, 
and the difference in financial circumstances is an 
advantage, which the law can not undertake in this 


232 CASES BROUGHT IN THE COMMERCE COURT. 

way to overcome. (Peavey v. Union Pacific Pail- 
toad 176 Fed., 409, 419.) It may not be consistent 
also with the exaction of this charge that provided 
only the cars are unloaded within the free time 
allowed, they may be reloaded and retained by the 
shipper indefinitely without any claim being made 
for demurrage. If this, which is the practical con¬ 
struction of the rule, is to be accepted as the cor¬ 
rect one, it throws serious doubt on its validity, the 
real ground on which the charge is to be sustained 
being the right of the carrier to have the cars 
promptly returned into service, which this has the 
effect to undo. Nor is the condition of the cars, 
once they have been delivered to the shipper, 
whether loaded or unloaded, of any concern to the 
carrier, except as an end to getting them back into 
use again. And there is also an apparent incon¬ 
sistency in holding inbound cars liable to demur¬ 
rage after they have been delivered and are on the 
tracks of the owner until they are unloaded, barring 
the free days, and vet in imposing it on outbound 
cars without regard to when they are loaded, only 
from the time they are placed on the interchange 
tracks. The justification of the rule is therefore 
to be sought in something outside of all this, upon 
a determination of the real principle involved. 

It is not necessary to decide whether a railroad 
can refuse or be required to haul private cars. 
Whatever may be its duty in this regard, it is con¬ 
ceded that such terms may be imposed as a condi¬ 
tion to hauling them as have a reasonable relation 




CASES BROUGHT IN THE COMMERCE COURT. 233 

to the transportation service in which they are em¬ 
ployed. And this concession necessarily sustains 
the present charge. In using these cars, whether 
as supplementary to or in place of their own, the 
railroads are entitled to require that there shall be 
a reasonably dependable supply, and that such cars 
shall not be withdrawn at will to serve the private 
purposes of the owners, but shall be kept in active 
and steady use, and to that end that they shall be 
put on a footing in this respect with other cars. 
The interest of the carrier that this should be the 
case is clear. For the time being these cars become 
a part of the rolling stock of the road, taking the 
place of those which the carrier would otherwise be 
called upon to supply. It may be that there are 
some kinds of these cars, such as the tank cars here, 
which the railroads do not keep on hand, but rely 
on each shipper furnishing his own. But that does 
not change the principle involved. In one form or 
another, the carrier is bound to supply the neces¬ 
sary transportation facilities for handling every 
kind of freight. And this, not to one shipper only, 
but equally and without discrimination to all. And 
it is put at a disadvantage and an extra burden 
upon it imposed if it can not be assured with regard 
to the supply of cars on which it can depend, but is 
liable to run short or be in excess, according as pri¬ 
vate cars are released or withheld. This the de¬ 
murrage charge which is complained of is calculated 
to overcome, and therefore may justly be imposed. 
The purpose of demurrage is to force the cars back 


234 CASES BROUGHT IN THE COMMERCE COURT. 

into use. Delay is made expensive, so that it may 
be an object to the shipper which he can not afford 
to disregard. Its exaction from private cars, the 
same as others, is therefore neither arbitrary nor 
unjust. 

Nor is it violative of the owner’s rights. It is 
simply a condition to the acceptance of his cars, 
which, for the reasons given, the carriers have 
found it necessary to impose, and with which there¬ 
fore he must expect to comply. Presumably the 
use of these cars operates to his advantage, or he 
would not be at the expense of supplying them. 
But he can not expect that the advantage shall be 
all on one side. And it having been found by ex¬ 
perience that demurrage on private, the same as on 
public, cars is a necessary transportation regula¬ 
tion, which is justified on principle, the carriers 
were within their rights in imposing it by the rule 
in question, and it must therefore be sustained. 

The petition will be dismissed on the merits with 
costs. 

Knapp, Presiding Judge, concurring: The con¬ 
clusion reached in this case is undoubtedly correct, 
and I disagree with the foregoing opinion only so 
far as it questions the right to enforce the demur¬ 
rage rule in controversy for the purpose or in aid 
of preventing undue preference and advantage to 
the owners of private cars. The commission based 
its decision in part on this ground and in my 
judgment was right in so doing. 


United States Commerce Court. 


No. 15. —May Session, 1911. 


United States ex rel. Attorney General 


v. 

Union Stock Yard and Transit Co. et al. 


on petition and' answer. 

Mr. Blackburn Esterline and Mr. William E. 
Lamb , special assistants to the Attorney General, 
with whom Mr. James A. Fowler , Assistant to the 
Attorney General, was on the brief, for the United 
States of America. 

Mr. Ralph M. Shaw , with whom Mr. John Barton 
Payne and Mr. Silas H. Strawn were on the brief, 
for Union Stock Yard and Transit Company of 
Chicago and for the Chicago Junction Railway 
Company. 

Mr. W. ID. Guthrie for the Chicago Junction Rail¬ 
ways and Union Stock Yards Company. 

Mr. Willard M. McEiven for Louis Pfaelzer & 
Sons. 

Before Knapp, Presiding Judge, and Archbald, 
Hunt, Carland, and Mack, Judges. 

235 





236 CASES BROUGHT IN THE COMMERCE COURT. 

[Nov. 14,1911.] 

Mack, Judge: 

This proceeding is brought to compel the 
Union Stock Yard and Transit Company of Chi¬ 
cago (hereinafter called the “ Stock Yard Co.”) 
and the Chicago Junction Railway Company 
(hereinafter called the “ Junction Co.”) to file with 
the Interstate Commerce Commission tariffs in con¬ 
formity with section 6, and reports and statements 
in conformity with section 20, of the act to regulate 
commerce (act of Feb. 4, 1887, as amended June 
29,1906; 34 Stat., 586 and 593) and of the rules and 
regulations adopted by the Commission pursuant 
thereto, and to enjoin the Stock Yard Co. and the 
individual defendants comprising the firm of Louis 
Pfaelzer & Sons (hereinafter called “ the Pfael- 
zers ”) from carrying out the terms and provisions 
of a contract made by them, and the Chicago Junc¬ 
tion Railways and Union Stock Yards Company 
(hereinafter called the “ Investment Co.”) from 
carrying out its written guaranty of this contract. 

The case has been heard on petition and answer. 
While the answers of the Stock Yard Co. and the 
Investment Co. neither admit nor deny certain 
allegations as to the activities of the Junction Co., 
which the latter in its answer admits to be true, 
and while no testimony has been offered in the case, 
it has been presented, both in the briefs and oral 
arguments by all counsel, on the basis of the truth 
of those allegations that are so confessed by the 


CASES BROUGHT IN THE COMMERCE COURT. 237 

Junction Co. We have, therefore, considered the 
petition, as against each defendant, in this light. 

Although the petition is clearly multifarious in 
joining mandamus proceedings, authorized by the 
act to regulate commerce, to secure compliance 
with its provisions, and injunction proceedings, au¬ 
thorized by section 3 of the act to further regulate 
commerce known as the Elkins Act (act of Feb. 
19, 1903, 32 Stat., 848), to restrain an alleged ille¬ 
gal rebate and discrimination, inasmuch as defend¬ 
ants do not raise this objection, we shall, without 
approving such practice, proceed to a determina¬ 
tion of the petitioner’s rights under both aspects of 
the case. 

The Stock Yard Co., a corporation organized in 
1865 by a special but public act of the State of Illi¬ 
nois, was thereby authorized not only to maintain 
stockyards and a hotel, but also to construct and 
maintain railway lines, tracks, and switches so as 
to connect its yards, then outside of the city of Chi¬ 
cago, with the tracks of all railroad lines entering 
Chicago within prescribed limits; to maintain the 
railroad, and to transport and allow to be trans¬ 
ported thereon, between such railroads themselves 
as well as between its yards and such railroads, 
property of every kind; to fix the rates of toll, pro¬ 
vided “ all fees and charges for freight * * * 

shall be subject to any general law * * * in 

reference * * * to railroads. ” It was further 

authorized to maintain its lines of railway across 


238 CASES BROUGHT IN THE COMMERCE COURT. 

public streets and highways, and was given power 
of condemnation. 

The act provided that nothing therein contained 
should be construed as giving authority to maintain 
or operate a railroad for the conveyance of passen¬ 
gers or freight in the city of Chicago; but since 
1865, the date of the charter, the city of Chicago 
has been extended so as to cover all of the property 
of the Stock Yard Co. 

It was further authorized by the charter to lease 
its property. Pursuant to this authority, it en¬ 
tered into an agreement with the Junction Co., a 
corporation organized under the general railroad 
act of the State of Illinois, whereby, in 1897, it, in 
effect, leased to the Junction Co. all of its railroad 
and railroad equipment for a term of 50 years. 
Under the agreement the Junction Co. obligated 
itself to conduct, operate, and manage the property; 
to perform all duties pertaining to a railroad, or of 
a railroad character, imposed upon the Stock Yard 
Co.; and to pay, as rental, two-thirds of the entire 
net earnings and revenue derived by it from the 
operation of all its lines of railroad and railroad 
track. 

The Junction Co. further obligated itself to sub¬ 
mit its books and papers showing its operations to 
the nominee of the Stock Yard Co. 

The Junction Co., at the time of the lease and 
for ten years thereafter, was the owner of other 
railroad property, and was concededly a common 
carrier within the act to regulate commerce. In 


CASES BROUGHT IN THE COMMERCE COURT. 239 

1907, however, it sold all of its other property. 
Since that time its sole business has been the opera¬ 
tion of the railroad so acquired from the Stock 
Yard Co., lying wholly within the State of Illinois, 
in substantially the same manner as it had been 
operated, prior to the lease, by the Stock Yard Co. 

The line of road consists of certain main tracks, 
running east and west from a point on the lake 
front in the city of Chicago near the intersection 
of Thirty-ninth Street with the tracks of the 
Illinois Central Railroad, and thence in a general 
westerly and northwesterly direction to a point 
some eight and a quarter miles distant from the 
lake, all in the State of Illinois, its parallel main 
tracks between these points aggregating about 
forty miles. The Union Stock Yards are located 
about two miles from the lake front, and, in addi¬ 
tion to connecting with these yards, the Junction 
Co. also has switch tracks to other industries 
located at or near there, aggregating some two hun¬ 
dred and fifty miles, by means of which main and 
switch tracks it serves in the neighborhood of six 
hundred and fifty (650) industries, all being in 
or near what is known as the stock yards district of 
Chicago. 

According to the record in this case, the Junction 
Co. neither receives goods for carriage on its own 
account nor deals on its own account with shippers 
or consignees. It is not necessary for the purposes 
of this decision to enumerate all of its activities in 
the operation of the road. Among them is the haul- 


240 CASES BROUGHT IN THE COMMERCE COURT. 

ing of loaded cars on behalf of trunk-line carriers, 
by whom it is employed and paid, from such trunk 
lines to the industries on its tracks, or to other trunk 
lines connecting with it. These cars are brought 
by the trunk-line carriers from points outside of 
the State destined to points in the district served 
by it or to points outside of the State. They are 
placed by the incoming trunk-line roads on what 
are known as the receiving tracks of the Junction 
Co., each car being marked with a transfer card, 
giving the name of the consignee of the freight 
therein contained, and thus indicating its destina¬ 
tion. The Junction Co. picks them-up with its 
own motive power and transports and delivers 
either to the designated consignee or industry on 
its line, or, when destined to points beyond the 
State limits, to the proper outgoing trunk line. 
These cars are transported in one unbroken line 
of railroad carriage from the several points where 
they originate outside of the State, over the line of 
the Junction Co. after their arrival at Chicago, to 
the railroad of the outgoing connecting carrier, 
and then to their points of destination outside of the 
State; this is done without the intervention of the 
shipper or consignee, or the performance by either 
of them of any intermediate act or service; and they 
move in this way on through bills of lading, covering 
the whole distance traversed, as do those also which 
are consigned and delivered to consignees and in¬ 
dustries on the line of the Junction Co. in the stock- 
yards district. 




CASES BROUGHT IN THE COMMERCE COURT. 241 

For the hauling or so-called switching service so 
rendered, the Junction Co. is paid by the trunk-line 
carriers which request the service a specified sum 
according to an established schedule of tariffs or 
charges. For instance, for the switching of cars 
back and forth to and from the receiving tracks of 
the various connecting trunk lines to the stock- 
yards, or to the industries in that vicinity, the Junc¬ 
tion Co. is paid a certain sum per car by the trunk¬ 
line carriers, and this it receives as a distinct 
switching charge, regardless of the commodity or 
character of freight in the car, its origin, destina¬ 
tion, or the through-freight charge of the trunk¬ 
line carriers. No specific charge therefor is made 
to the shipper or consignee, either by the Junction 
Co. or by the trunk-line company; the trunk line 
is said to absorb the charge. 

Since the lease of 1897, the Stock Yard Co. has 
had nothing whatever to do with the railroad or 
railroad business, which has been carried on exclu¬ 
sively by its lessee. It has confined itself, apart 
from the operation of the hotel, to conducting a 
stock yards business, with all which this involves 
and implies. It is not a dealer in cattle, but simply 
maintains a public market where all kinds of live 
stock can be bought and sold. As part of this busi¬ 
ness, it receives and cares for stock delivered by 
trunk line carriers at its docks and chutes, un¬ 
loading them for a specific amount per car paid 
to it by the carriers. The stock, so unloaded at its 
yards, is mostly stock consigned on through bills of 

48250—S. Doc. 789, 62-2-16 


242 CASES BROUGHT IN THE COMMERCE COURT. 

lading to parties doing business in and around the 
stock yards or stock yards district, which has been 
transported by the carriers from points outside of 
the State to the stock yards or to points on the line 
of the Junction Co. It also loads onto cars fur¬ 
nished by the trunk-line carriers stock outbound 
from the yards, for which it similarly receives a 
fixed sum per car from the carrier for which it 
performs this loading service, the stock so loaded 
being generally consigned from owners and dealers 
doing business in and about the stock yards district 
and being moved on through bills of lading over the 
Junction Co. tracks to the tracks of the trunk-line 
carriers, which haul them to points of destination 
beyond the limits of the State. The Stock Yard 
Co. also loads and unloads live stock consigned to 
or shipped by industrial establishments located 
along the right of way of the Junction Co., for 
which service the trunk-line carrier that handles 
the shipment pays a fixed sum per car. By 
reason of these facilities and business arrange¬ 
ments both live and dead freight is moved in an 
unbroken line of railroad carriage on through bills 
of lading from points outside of the State of Il¬ 
linois to the stock yards and industrial establish¬ 
ments located in that vicinity, and from such 
stock yards and industrial establishments to outside 
points. The Stock Yard Co., however, neither 
issues bills of lading for these shipments, whether 
through bills or others, nor participates in the 
freight rates charged by the carriers. It is com- 


CASES BROUGHT IN THE COMMERCE COURT. 243 

pensated solely in the manner indicated for the 
services which it performs. It does advance to the 
carriers, however, the freight charges due on bills 
of lading for stock delivered at the stock yards, 
collecting the same in turn from the consignees. 
But these advancements are made for the con¬ 
venience and accommodation of its customers, the 
commission men, who buy and sell stock at its 
yards, and have nothing whatever to do with the 
charges which it makes for loading and unloading. 
These are paid by the trunk line carriers as a sepa¬ 
rate matter. As part of its stock yards business 
the Stock Yard Co. further frequently feeds and 
waters live stock in transit, for which it is similarly 
paid a fixed compensation by the carrier handling 
the stock to and from its yards. And it also feeds, 
beds, and waters live stock shipped to consignees 
doing business at or near its yards, for which it is 
paid by the commission men who are engaged at its 
yards in buying and selling cattle. It also fre¬ 
quently makes alterations and repairs in cattle 
cars, for which it is paid by the carrier requesting 
the service. And, finally, for the accommodation 
of its patrons it has built and conducts a hotel in 
the neighborhood of its yards as empowered by its 
charter. 

The Investment Co. is a corporation organized 
under the laws of the State of New Jersey solely 
as an investment company for the purpose, among 
other things, of holding stock of the Stock Yard 


244 CASES BROUGHT IN THE COMMERCE COURT. 

Co. It owns over 90 per cent of this stock as well as 
practically all of the stock of the Junction Co., but 
it owns none of the property of, and neither man¬ 
ages nor controls, either company, except in so 
far as its stock ownership enables it to elect their 
directors. 

The contract between the Stock Yard Co. and 
the Pfaelzers in substance obligates the former 
to pay $50,000 to the latter in order to enable them 
to rebuild their packing plant at a specified place 
in the neighborhood of the Stock Yard Co.’s 
premises. In consideration thereof the Pfaelzers 
bind themselves to rebuild the plant, to conduct 
their business exclusively at the specified place, and 
either to buy all live stock slaughtered or packed 
by them in or within 200 miles of Chicago, for a 
period of fifteen years, at the yards of the Stock 
Yard Co., or, in lieu thereof, to pay it the same 
customary yardage, tolls, and charges that it would 
receive if such live stock were sent to its yards and 
there bought by them. 

The questions presented on this record are: 

First. Is the Junction Co. a “ common carrier 
engaged in transportation of property by railroad 
from one state to . another state of the United 
States ” within section one of the act to regulate 
commerce and therefore subject to the provisions of 
sections 6 and 20 thereof ¥ 

Second. Is the Stock Yard Co. the owner of a 
railroad engaged in interstate commerce ” within 


CASES BROUGHT IN THE COMMERCE COURT. 245 

sueli section 20 and therefore subject to its pro¬ 
visions ? 

Third. Is the Stock Yard Co., a common carrier 
within such section one and therefore subject to 
section 6 thereof and also to the provisions of sec¬ 
tion 3 of the Elkins Act ? 

Fourth. Is the Investment Co. such a carrier 
and therefore subject to section 3 of the Elkins 
Act? 

Fifth. Are the contract and guaranty a viola¬ 
tion of the act to regulate commerce or of the 
Elkins Act? 

First. Counsel for the Junction Co. expressly 
concede in this case that it is a common carrier. 
They deny, however, that it is engaged in interstate 
commerce. Counsel for other defendants, while not 
expressly denying, nevertheless intimate that it is 
not a common carrier. 

That it is a common and not a private carrier, if 
it be a carrier at all, is manifest from the fact that 
it is organized under the general railroad law of 
Illinois; under its constitution, article 11, section 12, 
all railroads are “ declared public highways and 
shall be free to all persons for the transportation of 
their persons and property thereon, under such 
regulations as may be prescribed by law.” More¬ 
over, it offers its services by the publication of a 
taritf in general circulation in Chcago to all the 
public who are in a position to avail themselves 
thereof. That the class is a limited one does not 


246 CASES BROUGHT IN THE COMMERCE COURT. 

affect the nature of the business or render it any 
the less public or common in its character. 

It is, however, suggested that it is not a carrier 
at all because what it hauls is the loaded car, and 
not the freight itself with which the car is loaded. 

That cars as well as other property may be the 
subject matter of carriage is, however, well estab¬ 
lished: P. d P. U. By. Co. v. C. R. I. d P. By. Co. 
(109 Ill., 135); M. P. By. Co. v. C. d A. Ry. Co. (25 
Fed., 317) ; U. S. v. C. d N. W. By. Co. (157 Fed., 
616, 619). 

It is further contended that the trunk line alone 
is the carrier and that the Junction Co. is merely 
its agent and instrumentality, and only as such 
agent performing, not a transportation or carriage, 
but a mere switching service. This service is 
likened to that of a towboat, which, under some 
circumstances and in some jurisdictions, is held 
not to be a carrier. 

That the trunk line has agreed to carry beyond 
its own line, and has expressly assumed a liability 
for the acts of connecting carriers, which, under 
the so-called Carmack amendment to section 20 of 
the act to regulate commerce (act of June 29, 1906, 
34 Stat., 584, 595), the law would now impose upon 
it as the initial carrier, does not, however, render 
the connecting carrier any the less the transporter 
or carrier of the property while it is actually haul¬ 
ing the loaded car on its own tracks, with its own 
motive power and its own servants, absolutely free 


CASES BROUGHT IN THE COMMERCE COURT. 247 

from any control or direction on the part of either 
trunk line. To call this service a switching service 
does not, in any respect, change its character; 
whether the work done be to switch a car 1 mile or 
to haul it 200 miles, it is none the less a transporta¬ 
tion or carriage of the car and its contents by an 
independent operator. As was well said in M. P. 
By. Go. v. Grocery Co. (55 Kans., 525) : 

“A railroad transporting a carload of freight 
one mile, using a switching engine for motive 
power, is just as much a common carrier as if the 
distance were a thousand miles by regular freight 
train. The fact that compensation for this partic¬ 
ular service was paid by the St. L. & S. F. Ry. Co., 
while it might render that company also responsi¬ 
ble, could not relieve defendant company from its 
liability as a carrier.” 

If then it be a common carrier of this property, 
it must be immaterial how or by whom it is paid. 
Whether its rate is a flat one or a proportion of the 
through rate, whether it is paid by the trunk line 
and absorbed or by the shipper or consignee, does 
not determine the nature of its services or alter the 
character of its offer to the public—to serve them 
as a common carrier. 

The Interstate Commerce Commission in Cattle 
Raisers’ Association v. F. W. & D. C. Ry. Co. 
(7 1. C. C. Rep., 513, 536), while holding, as counsel 
urge, that this very Stock Yard Co., under which 
the Junction Co. holds by lease, was not, prior to 
the lease of 1897, a common carrier in certain of its 


248 CASES BROUGHT IN THE COMMERCE COURT. 

activities, also expressed the opinion which counsel 
have not noted, that it was a common carrier 
with reference to the activities hereinabove de¬ 
scribed and now performed by the Junction Co. 
The Commission moreover point out (p. 537) that 
the Bridge Co., in K. & I. Bridge Go. v. L. & N. 
Ry. Go. (37 Fed., 567), which is here relied upon, 
was not, under its act of incorporation, a common 
carrier at all. 

In Union Stock Yards Co. of Omalm v. U. S. 
(169 Fed., 404), the Circuit Court of Appeals while 
holding, as counsel claim, that the Stock Yard Co. 
of Omaha was not a common carrier in its stock 
yards activities, also held that, as to its railroad 
activities, which are identical with those of the 
Junction Co., it was a common carrier engaged in 
interstate commerce within the Safety Appliance 
Law. On this point, Mr. Justice Van Devanter 
said: 

“It is the contention of counsel for the stock- 
yards company that the service performed by it is 
such only as the railroad companies are bound to 
perform for their patrons; that having no facili¬ 
ties for performing this service at South Omaha, 
the railroad companies merely employ the stock- 
yards company to furnish the requisite facilities 
and to operate them; that the performance of this 
service under such an employment does not make 
the stockyards company a common carrier or its 
property used therein a railroad; and that this 
service is purely a local switching service which fol- 




CASES BROUGHT IN THE COMMERCE COURT. 249 

lows or precedes transportation, and is not inter¬ 
state commerce. * * * 

6 6 It is of little significance that the stockyards 
company does not hold itself out as ready or willing 
generally to carry live stock for the public, for all 
the railroad companies at South Omaha do so hold 
themselves out, and it stands ready and willing to 
conduct, and actually does conduct, for hire a part 
of the transportation of every live-stock shipment 
which they accept for carriage to or from that 
point, including such shipments as are interstate.’’ 

Belt By. Co. of Chicago v. U. S. (168 Fed., 542); 
U. S. v. Sioux City Stockyards Co. (162 Fed., 556); 
U. S. v. Union Stockyards Co. (161 Fed., 919) ; 
and the dictum in McNamara v. The Wash. Ter¬ 
minal Co. (39 Wash. Law Rep., 458) are in accord¬ 
ance with the decision of Mr. Justice Van Devan- 
ter, and hold a company performing these activities 
not only a common carrier but also engaged in in¬ 
terstate commerce within the safety appliance or 
employer’s liability acts. 

If, then, the Junction Co. be, at least as to some 
of its activities, a common carrier, is it also “ en¬ 
gaged in the transportation of property by railroad 
from State to State ’ ’ ? 

Its location wholly within one State, the switching 
nature of its activities, which are said to be merely 
incidental to the transportation within that State, 
and its failure to receive a division or definite per¬ 
centage of the through interstate rate, are urged in 
support of the contention that it is not engaged in 


250 GASES BROUGHT IN THE COMMERCE COURT. 

transportation from one State to another. Counsel, 
moreover, contend that the amendment of Jnne 29, 
1906, to the first section of the act to regulate com¬ 
merce, narrows the class of railroads wholly within 
one State that are now subject to the act. Prior to 
the amendment, the act read: 1 1 Common carriers 
engaged in the transportation of property wholly 
by railroad, or partly by railroad and partly by 
water, when both are used under a common control, 
management, or arrangement for a continuous car¬ 
riage or shipment, from one State to any other 
State.” the amendment of 1906 the clause be¬ 
ginning “ or partly” and ending with the word 
“ shipment ” was inclosed in parentheses. 

It is urged that under the correct construction 
of the original section one, a railroad, even though 
wholly within one State, came within the act if it 
carried freight within that State under a common 
arrangement with an interstate carrier; but that, 
since under the amendment the common arrange¬ 
ment refers only to transportation partly by water 
and partly by rail, a carrier operating wholly by 
rail and within one State does not come within the 
amended act, even though it operate under such a 
common arrangement; in other words, that only 
railroads whose lines cross State boundaries are 
now subject to the Commission. 

The case of C. N. 0. & T. P. Ry. Co. v. I. C. G . 
(162 U. S., 184) does not, however, sustain the con¬ 
tention that prior to the amendment the clause 
“ under a common control,” etc., affected as well 


CASES BROUGHT IN THE COMMERCE COURT. 251 

the carriage wholly by railroad as the carriage 
partly by railroad and partly by water. (JJ. S. v. 
Colo. & N . W. Ry. Co., 157 Fed., 321, 329, 332.) 

Whatever be the true construction of section one 
as originally framed—and we agree with the Circuit 
Court of Appeals in U. S. v. Colo. & N. W. Ry. Co. 
(157 Fed., 321, 327), that “it is probable that 
the clause ‘ under a common control, etc.,’ qualified 
carrriers ‘ partly by railroad and partly by water ’ 
only, and had no application to such carriers 
‘wholly by railroad ’ it is clear that the sole 
purpose of the amendment was to remove any pos¬ 
sible doubt on this point and not to withdraw from 
the operation of the act railroads wholly within one 
State, but engaged in the transportation of articles 
while moving in interstate commerce, whether with 
or without a common arrangement with connecting 
lines. (JJ. S. v. C. & N. W. Ry. Co., supra, at 328.) 

The interstate commerce begins with the shipment 
of the article in one State directed and destined 
to another State. It ends only with the delivery 
at destination. All common carriers by railroad 
which participate in its actual transportation from 
the time of shipment to the time of delivery are en¬ 
gaged in the transportation of property from one 
State to another, whether their services be per¬ 
formed wholly within one State or in more than 
one State, whether such services be primary and 
called carriage or incidental and called switching, 
whether the carrier be paid a flat sum per car or 


252 CASES BROUGHT IN THE COMMERCE COURT. 

a percentage of the through rate, and whether such 
payment be made directly by the shipper or con¬ 
signee on the one hand or by the initial or final 
carrier on the other hand. (TJ. S. v. III. Term. Ry. 
Co 168 Fed., 456; Pac. Coast Ry. Co. v. TJ. S., 173 
Fed., 448.) 

While it is conceded that the cases above cited 
support these views, at least when the safety-ap¬ 
pliance acts are in question, it is sought to distin¬ 
guish most of them on the ground that the safety- 
appliance acts and the interstate commerce act have 
a different purpose and scope; that the former are 
intended primarily to regulate the cars at any time 
used in interstate commerce, and not primarily the 
carriers themselves in their relation to the public. 
Some statements from the decision of Judge San¬ 
born (TJ. S. v. C. & N. W. Ry. Co., 157 Fed., 321) 
to the effect that the two acts are not in pari ma¬ 
teria, and therefore not necessarily to be construed 
alike, are cited in support of this contention. The 
argument, however, which was answered in that 
opinion, was as follows: The original interstate 
commerce act subjected to the control of the 
Interstate Commerce Commission a carrier by 
railroad within one State only if it operated under 
a common arrangement with a carrier in another 
State. That act was passed in 1887. In 1893 the 
first safety-appliance act was passed. In terms it 
applied to every “ carrier by railroad engaged in 
interstate commerce.” Nevertheless, as it, too, sub- 


CASES BROUGHT IN THE COMMERCE COURT. 253 

jected carriers to the control of the commission, the 
broad language must be deemed limited to the class 
of carriers affected by the act of 1887, because the 
act of 1887 clearly declared the intent of Congress 
as to the extent of the class over which the commis¬ 
sion should have control. 

The answer to this argument, given by the court, 
was twofold: First, the major premise, though 
adopted by some courts, was erroneous; all com¬ 
mon carriers engaged in interstate transportation 
wholly by railroad were embraced within the terms 
of the original act to regulate commerce. Second, 
even if it were correct, there was no such relation 
between the two acts as to cause the court to modify 
the broad language of the safety-appliance act by 
expressly inserting therein the limitation of the 
interstate-commerce act. 

It is manifest that this decision does not support 
the contention of counsel. 

Again it is said that the safety-appliance act 
as now amended (act of Mar. 2, 1903, 32 Stat. 943) 
requires all cars engaged in interstate commerce, 
whether owned by an interstate railroad or by a 
private individual not engaged in the transporta¬ 
tion business, to be equipped as therein directed. 
But whatever the scope of the act may be (So. By. 
Co. v. TJ. S., U. S. Sup. Court, Oct. 31, 1911), only 
the “ common carrier engaged in interstate com¬ 
merce ” is punishable for its violation. Cases hold¬ 
ing companies whose activities are the same as those 


254 CASES BROUGHT IN THE COMMERCE COURT. 

of the Junction Co., guilty of such a violation, are 
therefore direct authorities on the question now 
under consideration. 

As therefore the designation used in the several 
acts, “ carrier engaged by railroad in interstate 
commerce ” and “ carrier engaged by railroad in 
the transportation of property from one State to 
another” are not mutually exclusive, but, on the 
contrary, the one includes the other; as all of the 
authorities cited to or found by us expressly 
hold that such of the activities of the Junction 
Co. as are hereinabove set forth make it a 
common carrier engaged in interstate commerce 
by railroad; we are of the opinion that it is a com¬ 
mon carrier engaged in the transportation of prop¬ 
erty from one State to another, within section 1 of 
the act to regulate commerce, and as such subject 
to the requirements of section 6 and section 20 of 
that act. 

Second. By the amendment of June 29, 1906, 
the commission was authorized, under section 20, 
to require annual reports, not only ‘ 4 from all com¬ 
mon carriers subject to the provisions of this act,” 
but also “ from the owners of all railroads engaged 
in interstate commerce as defined in this act.” 
This is the only section of the act that refers to the 
owners of the railroad as distinguished from the 
common carrier. The evident purpose of Congress 
was to enable the commission to obtain certain in¬ 
formation which the lessee operator might be un¬ 
able to give, but which the owner of a railroad, 


CASES BROUGHT IN THE COMMERCE COURT. 255 

either operated by a common carrier engaged in 
interstate commerce as defined in the act or which 
is a highway of interstate commerce, could fur¬ 
nish. Whichever be the true construction of this 
clause (So. By. Go. v. TJ. S., supra) the Stock Yard 
Co., as lessor, is the owner of such a railroad, and 
therefore comes within the provisions of section 20. 
What the obligations are which that section im¬ 
poses upon such owners, we are not now called 
upon to decide. 

Third. None of the present activities of the Stock 
Yard Co. as the owner and manager of the stock 
yards and hotel business, hereinabove fully de¬ 
tailed, in our judgment, make it a common carrier. 
The facilities which it affords may enter to a cer¬ 
tain extent into the carriage of live and dead stock 
by the railroads with which it has occasion to deal. 
And the services which it renders in that connec¬ 
tion may take on a public character. (Cotting v. 
Kansas City Stock Yards, 183 U. S., 79, 85.) 
But that does not affect the case. A carrier must 
transport or carry. It must actually engage, in 
other words, in the carriage of goods or persons 
from point to point, of which there is no semblance 
in anything which is done here. (Union Stock 
Yards v. U. S., 169 Fed., 404, 406.) 

It is said, however, that the charter of the Stock 
Yard Co. contemplated that it should build 
and operate a railroad to connect with the trunk 
lines which enter Chicago, and empowered it so to 
do; and that it can not escape this charter obliga- 


256 CASES BROUGHT IN THE COMMERCE COURT. 

tion or put off the character of a common carrier 
thereby impressed on it, either by not exercising 
the power or by turning over to another company 
the railroad which it built. The corporate charac¬ 
ter of a company—and much less the business in 
which it is engaged—is not determined by its re¬ 
served and unused powers. ( Tiffany v. La Plume 
Condensed Milk Co., 141 Fed., 444; Gate v. Connell, 
173 Fed., 445.) It is what it does, and not simply 
what it may do, by which it is to be judged. A cor¬ 
poration would in no sense be a common carrier if 
it never constructed or ran a railroad or other means 
of transportation merely because it had the charter 
power. But the Stock Yard Co. did exercise such 
power; it built and operated the railroad. It was, at 
that time, a common carrier. ( Cattle Raisers’ Ass’n 
v. F. W. B. C. Ry. Co supra.) It has, however, pur¬ 
suant to its charter power, leased its entire railroad 
property. Thereupon the railroad, with the loco¬ 
motives and cars required to run it, went out of the 
possession and control of the Stock Yard Co., which 
thereafter confined its operations to the stock-yard 
business under its other charter powers. Clearly 
the mere reversionary ownership of the railway, 
which it retained, did not make it a carrier or im¬ 
pose upon it the obligations or duties of a carrier. 

While under the law of Illinois {Penn. Co. v. 
Ellett,Admr., 132 Ill., 654) and of some other States, 
a lessor is liable like a common carrier for damages 
caused by its lessee, an independent operating com¬ 
pany, the weight of authority appears to be con- 


CASES BROUGHT IN THE COMMERCE COURT. 257 

trary to this view. (1 Elliott on Railroads, sec. 
468.) In any event, the Federal courts in Illinois 
have refused to follow the Illinois doctrine (Yates 
v. III. Central Ey. Co 137 Fed.,943;CW£i$v. C.,C., 
C. & St. L. Ey. Co., 140 Fed., 777) on the ground 
that this is a question of general law. Moreover, 
whatever may be the liability of a lessor railroad for 
damage to persons or property while being trans¬ 
ported over the railroad owned by it but operated 
by a lessee, that liability, if any, is due to the obli¬ 
gations imposed upon it by the State. The State 
may declare that a non-operating lessor shall be 
liable to the same extent as a common carrier for 
such damages. It can not, however, by such a dec¬ 
laration make the lessor a common carrier in fact, 
within the meaning of the act to regulate commerce. 
Common carrier as therein used is to be taken in 
its ordinary signification of the one engaged in the 
actual work of transportation; that is, the operat¬ 
ing company. Any doubt that may theretofore 
have existed on this point is, in our judgment, re¬ 
moved by the amendment of 1906 to section 20 of 
the act, whereby, in express terms, the owner of a 
railroad engaged in interstate commerce is referred 
to in contradistinction to the common carrier sub¬ 
ject to the act. The decision of the Interstate Com¬ 
merce Commission in Independent Refiners’ Ass’n. 
v. P. E. Co. (6 I. C. C. R., 52) in so far as it holds 
the lessor, merely as lessor, liable for the lessee’s 
violation of its obligations under the interstate- 
commerce act is not to be supported. 

48250—S. Doc. 789, 62-2-17 


258 CASES BROUGHT IN THE COMMERCE COURT. 

The commission in that case, however, based the 
liability of the lessor also on the fact that it re¬ 
ceived as rental not a fixed annual sum, but one- 
half of the gross revenues. A holding of the Cir¬ 
cuit Court for the Western District of Pennsyl¬ 
vania, in accordance with this ruling of the com¬ 
mission, that lessor and lessee thereby were to 
be deemed in a sense joint operators, was, however, 
reversed in the Circuit Court of Appeals. ( West¬ 
ern N. Y. & P. R. Co. v. Penn Refining Co., 137 
Fed., 343, 356.) There would seem to be no dif¬ 
ference in the relation between a lessor and a 
lessee when, as in that case, the rental is a per¬ 
centage of the gross receipts, and when, as in this 
case, the rental is a percentage of the net receipts. 
The test of a joint operation by lessor and lessee 
corporations, like that of a partnership between 
individuals, is not a sharing merely in the net 
profits of the enterprise. (Holmes v. Old Colony 
R. R. Co., 5 Gray, 58.) The Stock Yard Co. can 
not be deemed a joint operator with the Junction 
Co. and therefore a common carrier within the act 
to regulate commerce, merely because it receives 
two-thirds of the net revenues of the Junction Co. 
or because its auditor acts for both companies. 

Even if the Investment Co., by reason of its own¬ 
ership of the stock of the Junction Co., could be 
held to be in such control of the Junction Co. as, for 
some purposes, to make the two identical, neverthe¬ 
less, the Stock Yard Co. would not thereby, and 
through the ownership by the Investment Co. of 


CASES BROUGHT IN THE COMMERCE COURT. 259 

90 per cent of its stock, become a common carrier. 
It was the common carrier’s ownership of 99 per 
cent of the stock of the Wharf Co. organized for the 
very purpose of furnishing it terminal facilities 
as a part of the interstate system, that, in South¬ 
ern Pacific Terminal Go. v. I. C. C. & Young (219 
U. S., 499) was held to make the Wharf Co. a part 
of the common carrier’s system and, therefore, a 
common carrier subject to the act. We see no 
analogy to the situation in this case. 

Fourth. The Investment Co., whatever may be 
its control over the Junction Co. or the Stock Yard 
Co., can not, in any sense, be deemed a common 
carrier. Its ownership of the entire stock of the 
Junction Co. would not make it, any more than 
such ownership would make an individual, a com¬ 
mon carrier. It might be termed, in a sense, the 
owner of a common carrier, but, as it is not itself a 
common carrier, it does not, in our judgment, come 
within section 1 of the interstate commerce act, or 
section 3 of the Elkins Act. 

Fifth. While section 1 of the Elkins Act as 
amended (act of June 29th, 1906, 34 Stat., 584, 
587), after prohibiting “ any person or corpora¬ 
tion ” from rebating or discriminating in respect 
to an interstate transportation, subjects to criminal 
prosecution “any person or corporation, whether 
shipper or carrier,” who knowingly violates its 
provisions, section 3 of the Elkins Act, under 
which this suit is brought, authorizes equity pro¬ 
ceedings to enjoin such offenses only when a 


260 CASES BROUGHT BN THE COMMERCE COURT. 

“ common carrier ” has committed or is about to 
commit them. If the decision in I. G C. v. Reich- 
man (145 Fed., 235) correctly holds that one who 
is neither shipper nor carrier can be prosecuted 
under section 1—as to which we intimate no 
opinion—the question whether the proposed pay¬ 
ment to the Pfaelzers could in any way be deemed 
such a rebate or discrimination could be tested by 
proceedings thereunder in the proper forum. 

We have found it unnecessary to determine or 
even to consider it, in view of our conclusion that 
neither the Stock Yard Co. nor the Investment Co. 
is a common carrier. 

Section 6 of the interstate-commerce act imposes 
a positive duty on common carriers subject thereto 
in respect to the filing of tariffs and other docu¬ 
ments. Section 20, on the other hand, merely au¬ 
thorizes the commission to require reports from 
common carriers and owners of railroads engaged 
in interstate commerce. There is no allegation in 
the petition filed in this cause that the Interstate 
Commerce Commission in any manner, either by 
general or special order or otherwise, has ever 
required the Junction Co. or the Stock Yard Co. to 
furnish any such reports as are contemplated under 
section 20. In the absence of such an order, no 
mandamus to make such reports can be issued by 
this court. 

It follows, therefore, that the petition must be 
dismissed, not only as against defendants other 


CASES BROUGHT IN THE COMMERCE COURT. 261 

than the Junction Go. and the Stock Yard Co., but 
also as against the Stock Yard Co., and the relief 
prayed for under section 20 of the act must be 
denied as against the Junction Co. 

The mandatory ivrit will be issued against the 
Junction Co., as a common carrier subject to the 
act, to comply with its obligations under section 6 
thereof. 

Archbald, Judge, dissenting in part. 

The petition is well dismissed as to the three re¬ 
spondents, with respect to whom it is found that 
neither the Elkins nor the interstate commerce act 
apply. It is held, however, that the Junction Rail¬ 
way Company is a common carrier engaged in in¬ 
terstate commerce and therefore liable to publish 
tariffs and to make reports, and as to this I feel 
compelled to dissent. 

Nothing of the kind can be predicated on the use 
which the Junction Railway Company permits of 
its tracks by the trunk-line carriers as a connecting 
link, to haul by their own motive power through 
trains moving from one to the other, east or west. 
In the loan of its tracks for this purpose, however 
regular or persisted in, it is not exercising any of 
the functions of a common carrier even though it 
take tolls therefor, any more than a turnpike road, 
upon which people travel; or a toll bridge spanning 
a stream, which accommodates those who go across; 
or a canal, which, without doing any towing, merely 
maintains a waterway for public use. (Moore 
Carriers, p. 66, 67; Kentucky & Indiana Bridge Co. 


262 CASES BROUGHT IN THE COMMERCE COURT. 

v. Louis. & Nash. F. F., 37 Fed., 573, 615; Grigsby 
v. Chappell, 5 Rich. (S. C.), 443.) The traffic 
which, by leave of the Junction Railway Company, 
goes on over its tracks in this way is that of the 
trunk lines using them and not of the Junction 
Railway. The charges for through carriage, in¬ 
cluding this part of the movement, are made by and 
paid to these lines, and the Junction Railway does 
not participate by division or otherwise therein. 
Neither does it know or come in contact with the 
shippers or consignees or with the freight which is 
so moved. It simply lets its road and gets pay for 
its use at so much a car, which neither makes it a 
carrier nor constitutes an engagement by it in inter¬ 
state trade. 

Neither is there anything to make it a common 
carrier in what it does at the Union Freight Sta¬ 
tion, which it maintains, in the way of receiving, 
distributing, and forwarding L. C. L. freight. So 
far as it acts with respect to this for the Baltimore 
& Ohio Railroad it acts as the local agent of that 
company, and is not chargeable in any larger de¬ 
gree. The receiving, loading, and forwarding 
which it does for others, including the collection 
of freight charges, when required by the trunk¬ 
line carriers to be prepaid, and the giving of re¬ 
ceipts which are exchangeable for bills of lading 
therefor, may be of a somewhat more general 
character. But in no respect do they amount to 
a transportation of such freight by the Junction 
Railway on its own account, nor does the Junction 



CAS KB BROUGHT IX THE COMMERCE COURT. 263 

Railway Company in any sense act as a common 
carrier with respect thereto. It merely serves as 
a receiving and forwarding agent, for which it is 
compensated by the trunk line carriers by which 
its services are invoked. Having no concern as 
such agent in the transportation of this freight, 
nor any interest in the freight rates charged, and 
the services being complete when rendered and con¬ 
fined to the mere handling of the freight in the 
act of receiving and forwarding it, there is nothing 
in any of this upon which a common carriage can 
be charged. (Moore Carriers, p. 68.) And the 
same is true also with regard to the weighing of 
freight which it does, even though these weights 
are at times made the basis of freight charges 
and adjustments between carrier and consignor or 
consignee. These activities are alluded to at this 
time, not only because they are set up in ilie bill, 
but because they are necessary to be considered in 
connection with the other things which it does in 
determining the character which the Junction 
Railway Company in fact bears, which, to the ex¬ 
tent of these activities at least, is plainly that of 
a mere intermediary or local agency of the trunk¬ 
line companies for which the services are per¬ 
formed. And this character, in all that it does, it 
consistently maintains. 

The so-called hauling and switching services, 
however, remain. And for a full understanding of 
them, they must be given somewhat at large. The 
practice in this regard with respect to live and 


264 CASES BROUGHT IN THE COMMERCE COURT. 

dead freight is not exactly the same. Where in¬ 
bound live stock originates outside of the State, 
and is destined to points in the stockyards district, 
the trunk line on which it arrives generally hauls 
it with its own motive power over the tracks of the 
junction railway from the connecting point to the 
unloading docks, chutes, and platforms of the 
stockyards company; although horses are usually 
delivered by the Junction Railway Company after 
having been received from the trunk line by which 
they are brought in. Outbound carload shipments 
of live stock, however, which originate in the stock- 
yards district and are destined to points outside 
the State, after being loaded into cars placed by the 
Junction Railway Company at the loading chutes 
of the stockyards, are hauled by the Junction Rail¬ 
way over its tracks and delivered at the proper con¬ 
necting point to the trunk line which is to trans¬ 
port them beyond. Dead freight in carload lots 
brought by the trunk line carriers from points out¬ 
side of the State, destined to points in the district 
served by the Junction Railway on the line of its 
tracks, and sometimes also destined to points be¬ 
yond, is placed by the trunk line roads on what are 
known as the receiving tracks of the Junction Rail¬ 
way, each car being marked with a card, giving the 
name of the consignee, by which its destination 
may be known. And these cars the Junction Rail¬ 
way Company picks up with its own motive power 
and delivers to the designated consignee or indus¬ 
try; or, where they are destined to points beyond 


CASES BROUGHT IN THE COMMERCE COURT. 265 

the State, delivers them to the proper connecting 
outgoing trunk line, according to the destination 
indicated thereon. Through shipments of this 
kind move on bills of lading covering the whole dis¬ 
tance traversed, including the tracks of the Junc¬ 
tion Railway. And the same is true of consign¬ 
ments to and from the Union Stockyards or the in¬ 
dustries of the stockyards district adjacent to the 
railway company’s line. But the Junction Rail¬ 
way Company is not known to the shipper or the 
consignee in the transaction, all that it does being 
done for the trunk line carrier which employs it, by 
which it is paid so much a car. And this payment 
also it receives as a distinct switching charge, re¬ 
gardless of whether the car is loaded or empty, or 
where it is to go to or where it comes from. The 
question then is whether by reason of what it so 
does the Junction Railway Company is a common 
carrier engaged as such in the transportation of 
persons or property in interstate trade, within the 
meaning of the law. 

It is claimed that it is because it participates in 
the movement of the freight which passes over its 
tracks in the channels of commerce in the way 
which has been described, in which movement, it 
is said, it is an integral and essential factor and 
not a mere local aid. ( C . N. 0. & T. P. R. R. v. 
Inter. Com. Com., 162 U. S., 184.) But to me that 
does not seem to be the case. The part which it 
takes in that movement is a purely local and inci¬ 
dental one, in no respect having anything to do 


266 CASES BROUGHT IN THE COMMERCE COURT. 

with the movement of freight, as freight, and much 
less as interstate freight, its services being confined 
to the mere handling of the cars in which the 
freight is contained, this being carried on and com¬ 
pleted also wholly within the State, and not, in any 
respect, extending to anything beyond. It knows 
no one outside of the trunk line carriers by which 
it is employed, and does not come in contact or 
have any relation with the shipper or consignee 
except as agent of the trunk line carriers in the 
receiving and delivering of freight. Nor has it 
anything to do with the freight rates charged, the 
tolls which it gets being taken care of by the trunk 
lines without appearing in those rates. The serv¬ 
ice which it performs is a mere shifting or switch¬ 
ing service, having no relation to anything outside 
of that so far as it is concerned. Its undertaking 
is to shift the cars and not the freight which they 
contain, in the movement of which freight it has 
no interest, and as emphasizing this it is paid by 
the car without regard to contents, origin, or desti¬ 
nation, whether to or from points within or with¬ 
out the State. When the cars are being moved by 
the Junction Railway Company the carrier for 
which in each instance this is being done, in legal 
contemplation as well as in actual effect, is trans¬ 
porting them, the Junction Railway Company, by 
its engineers and employees, being merely the me¬ 
dium by which it is accomplished. To engage in 
transportation within the meaning of the law 
there must be a participation in the result; to 


CASES BROUGHT IN THE COMMERCE COURT. 267 

merely touch it in passing, as here, is not enough. 
The statute was enacted to regulate interstate com¬ 
merce, and there must be a direct or proximate con¬ 
nection with interstate shipments to bring the case 
within its terms; and the mere local shifting or han¬ 
dling of cars in which the commodities move inci¬ 
dentally in transit, wholly within the State where it 
is done, without any share in the freight paid, the 
service rendered being performed for the carrier by 
which the through transportation is being done, is 
not, in my judgment, engaging in interstate com¬ 
merce in the commodities or in the interstate trans¬ 
portation of them, with which alone the statute 
undertakes to deal. 

It is no doubt true that railroads performing 
similar switching services to those which we have 
here have been held to be engaged in interstate 
commerce, within the meaning of the safety appli¬ 
ance law. ( United States v. Col. & N. W. R. R., 
157 Fed., 321; United States v. Union Stock Yards 
of Omaha, 161 Fed., 919; Belt Line R. R. v. United 
States, 168 Fed., 542; Union Stock Yards of 
Omaha v. United States, 169 Fed., 404.) But there 
is by no means a unanimity of opinion among 
the judges by whom these cases were decided, and, 
as is pointed out by Judge Sanborn, in the lead¬ 
ing one ( United States v. Col. & N. W. R. R., 
157 Fed., 321) the safety appliance act is to be 
given a broader construction than the interstate 
commerce act, even though in the description of 
the carriers, who are made subject to it, the same 


268 CASES BROUGHT IN THE COMMERCE COURT. 

terms largely are employed in each; the one act 
dealing with the physical or mechanical instru¬ 
mentalities of interstate commerce, looking to the 
safety of employees, while the other is directed 
to the business or commercial side, regulating the 
rates and practices which are there to prevail. 
These decisions therefore, as it seems to me, are 
misleading and valueless as precedents, and are not 
to be applied. 

Neither is the case like that of MacNamara v. 
Washington Terminal Company (39 Wash. Law 
Rep., 458), recently decided by the District of Co¬ 
lumbia Court of Appeals, on which much reliance 
is placed. The case there arose under the employ¬ 
ers’ liability act, the validity of which, so far as the 
District of Columbia is concerned, does not depend, 
as it is pointed out, on the right of Congress to legis¬ 
late with regard to interstate or foreign trade; and 
the question simply was whether the Terminal Com¬ 
pany was a common carrier engaged in trade or 
commerce in the District within the meaning of the 
law. Whether the Terminal Company, however, 
was engaged in interstate commerce was also held to- 
be involved; and, passing upon that question, it was 
decided that it was. But the considerations which 
led to this result are to be observed. The tracks 
and station of the Terminal Company, it is to be 
noted, are not mere facilities for the handling of 
passengers and baggage at Washington. As to the 
railroads entering the city, the Terminal Company 
complete^ monopolizes everything that is done. 


CASES BROUGHT IN THE COMMERCE COURT. 269 

By its agents and employees it controls the opera¬ 
tion of trains over its tracks into and out of the 
station, and with its engines it shifts empty cars in 
the making up of trains. Steam railroad passenger 
traffic, entering and leaving Washington, is thus 
completely and exclusively managed, operated, and 
controlled by the Terminal Company within the 
zone occupied by its station and tracks. The con¬ 
clusion reached, in view of this, was that it was not 
to be taken as a mere line of railroad, carried on 
wholly and independently within the District, but 
that it was a direct component part of the various 
railroad systems engaged in interstate commerce, 
through which an entrance into Washington was 
obtained. And it is this integral and indispensable 
part which it has in interstate trade coming into 
and going out of the city that is the criterion by 
which its position as a medium of interstate com¬ 
merce is to be judged. It is, in other words, as with 
the Southern Pacific Terminal (219 U. S., 498), its 
relation to and systematic connection with the inter¬ 
state railroads, of which it forms the Washington 
end, and its direct participation in the handling 
and management of the passenger and express 
traffic there, that makes it a common carrier en¬ 
gaged in interstate commerce within the meaning of 
the Federal law. 

The distinction between that case and the one in 
hand is clear. The Junction Railway Company 
was not organized to supply terminal facilities, 


270 CASES BROUGHT IN THE COMMERCE COURT. 

nor does it in fact supply them for any interstate 
railroad or business. Nor is it a component part 
of any such railroad system. Nor does it, in the 
hauling and switching services which it performs, 
take the place for the time being, as to consignor 
or consignee, of the trunk line carrier for which it 
acts. It simply moves back and forth, by means 
of its engines and employees, cars which it is put 
by the trunk line carriers in the way to take, to 
which carriers in the performance of that service 
it is alone responsible therefor. It is not an agency 
of commerce as such, State or interstate, but of 
the railroads which have that commerce in charge. 
It is true that it lias a railroad which it operates, 
over which that commerce incidentally moves. 
But that does not change the character of the 
services in which it is engaged. The part which it 
plays, the relation which it assumes, and the result 
of what it does, begin and end, so far as it is con¬ 
cerned, with the immediate service which it ren¬ 
ders, which negatives the idea that anything like 
interstate commerce is intended or involved. Not 
engaging as a common carrier in such transporta¬ 
tion, it is not brought in consequence within the 
terms of the act, and can not be required either to 
publish tariffs or to make reports. And the peti¬ 
tion ought therefore, in my judgment, to be in all 
respects denied. 


United States Commerce Court. 


No. 15 —October Session, 1911. 


United States ex rel Attorney General 


v . 

Union Stock Yard and Transit Co. et al. 


ON PETITION FOR REHEARING. 

Mr. Blackburn Esterline and Mr. William E. 
Lamb , special assistants to the Attorney General, 
for the United States. 

Mr. Ralph M. Shaw for Union Stock Yard and 
Transit Co. of Chicago and for the Chicago Junc¬ 
tion Railway Company. 

Mr. Willard M. McEwen for Louis Pfaelzer & 
Sons. 

Before Knapp, Presiding Judge, and Archbald, 
Hunt, Carland, and Mack, Judges. 

[February 13,1912.] 

Mack, Judge: 

It is urged that this court, in the opinion here¬ 
tofore filed, has too narrowly limited its jurisdic¬ 
tion in declining to consider whether or not the 

271 





272 CASES BROUGHT IN THE COMMERCE COURT. 

proposed payment by the Stock Yards Company 
to the Pfaelzers is a rebate or discrimination for¬ 
bidden by law. 

Counsel contend that inasmuch as the Junction 
Co. which is alleged and has been found by us to 
be a common carrier engaged in interstate com¬ 
merce is one of the defendants, therefore, under 
section 2, as well as under section 3, of the Elkins 
Act, other parties not common carriers involved 
in the subject matter of the proceedings may like¬ 
wise be proceeded against in the same action. 

But as we stated in the former opinion, two 
entirely separate cases have been joined in this 
proceeding, the one against the Junction Co. and 
the Stock Yards Co. to compel compliance with sec¬ 
tions 6 and 20 of the act to regulate commerce; 
the other against the Stock Yards Co., the Invest¬ 
ment Co., and the Pfaelzers, under the Elkins Act, 
to enjoin an alleged discrimination and rebate. 

While we have not, of our own motion, dismissed 
the petition for misjoinder of actions and multi¬ 
fariousness, nevertheless we can not deal with the 
case otherwise than as involving the two distinct 
causes of action; the fact that the Junction Co. is 
a party to the first of these does not make it also 
a party to the second. No relief of any kind is 
prayed for against it in respect to the alleged dis¬ 
crimination and rebate. If, as we interpret sec¬ 
tions two and three of the Elkins Act, a proceeding 
thereunder in equity can not be maintained against 


CASES BROUGHT IN THE COMMERCE COURT. 273 

parties other than a common carrier engaged in 
interstate commerce unless on proper allegations 
relief is also sought against the commission by such 
a carrier of one or more of the acts therein pro¬ 
hibited, the fact that the Junction Co., which is 
such a carrier, is a party defendant on the other 
branch of the case furnishes no basis for this pro¬ 
ceeding against the other defendants. 

But counsel further urge that, inasmuch as the 
Stock Yards Co. is, in good faith, alleged to be an 
interstate common carrier, this court not only has 
jurisdiction but is in duty bound to determine the 
legality of the contract with the Pfaelzers. 

There is no question as to the jurisdiction of the 
court in the premises; the petition purports to 
state a case under the Elkins Act. If the defend¬ 
ants had admitted that the Stock Yards Co. Avas an 
interstate common carrier, the only question to be 
determined by this court would ha\ T e been the legal¬ 
ity of the contract. But when the defendants de¬ 
nied this allegation, they raised an issue of fact 
the determination of which necessarily preceded 
any consideration of the issue of law. When that 
issue of fact Avas decided in their favor the peti¬ 
tion had to be dismissed. 

The court nevertheless had the power and the 
right to base its decision on either or both of tAvo 
possible grounds, and if we had been clearly of the 
opinion that such a contract as the one in question, 
made by an interstate common carrier, were legal, 

48250—S. Doc. 789. 62-2—18 


274 CASES BROUGHT IN THE COMMERCE COURT. 

the petition would have been dismissed on both 
grounds. 

The only case stated, or that could properly have 
been stated in the petition, was one charging that 
an interstate carrier had made a contract in viola¬ 
tion of the law. Defendants, however, are now 
asking us to decide a totally different question— 
whether or not such a contract made by one not a 
carrier is legal. However important it may be to 
them to secure an authoritative ruling thereon, any 
answer that we might give would not be responsive 
to the issues raised in the case before us, and would, 
therefore, be a mere dictum, and of no binding 
force. 

No authority has been vested in this court to ad¬ 
vise parties, on their application, whether pro¬ 
posed undertakings would, if consummated, vio¬ 
late the law, or, on the application of the Govern¬ 
ment, to enjoin the commission of alleged illegal 
acts, except only when such an injunction is sought 
against an interstate common carrier. 

An order will therefore be entered in accordance 
with the original opinion filed herein . 


United States Commerce Court. 

No. 18.— October Session, 1911. 


Russe & Burgess 

v. 

Interstate Commerce Commission, respondent; 
and United States, Illinois Central Railroad 
Company, and Atchison, Topeka & Santa Fe 
Railway Company, interveners. 


ON DEMURRER TO PETITION. 

For opinion of Interstate Commerce Commission 
see 13 Inter. Com. Com. Rep., 668. See also 190 
Fed., 659. 

Mr. W. A. Percy for petitioners. 

Mr. P. J. Farrell for Interstate Commerce Com¬ 
mission. 

Mr. James A. Fowler, assistant to the Attorney 
General, and Mr. Blackburn Esterline , special 
assistant to the Attorney General, for the United 
States. 

Mr. R. Walton Moore, Mr. Frank W. Gwathmey, 
Mr. Robert Dunlap, and Mr. T. J. Norton for in¬ 
tervening carriers. 

Before Knapp, Presiding Judge, and Archbald, 
Hunt, Carland and Mack, Judges. 


275 




276 CASES BROUGHT IN THE COMMERCE COURT. 


[February 13,1912.] 

Archbald, Judge . 

Complaint was made to the Commission by the 
petitioners, Russe & Burgess, with others, against 
numerous railroads, members of the Trans-Conti¬ 
nental Freight Bureau, charging that excessive 
rates had been exacted for the transportation of 
lumber from Chicago and Mississippi River points 
to the Pacific coast, and asking for reparation. The 
Commission, upon due investigation, found that the 
existing rate of eighty-five cents per hundred 
pounds was more than was reasonable; that 
seventy-five cents was a reasonable rate, which it 
fixed as the maximum rate for the future; and 
that the complainants were entitled to repara¬ 
tion on this basis for shipments subsequent to the 
filing of their complaint, but not on prior ship¬ 
ments because of laches. And on application for 
a rehearing by complainants this ruling was re-af¬ 
firmed. The petitioners thereupon filed their bill 
in the Circuit Court of the United States for the 
Northern District of Illinois, praying that the 
order of the Commission, so far as it denied repara¬ 
tion prior to the filing of the complaint, be set aside 
and the Commission enjoined and required to pro¬ 
ceed and correct its order so as to allow the repara¬ 
tion contended for, ascertaining by appropriate 


CASES BROUGHT IN THE COMMERCE COURT. 277 

action the amounts severally due to the different 
petitioners. There was also a prayer for a decree 
against the respondent railroads for the amount 
of the excess charges which had been paid, but it 
was admitted that this feature of the case could not 
be maintained and it was therefore abandoned 
On the organization of the Commerce Court the 
case was transferred here, and—without stopping 
to note certain intermediate proceedings—it now 
comes up, on demurrer to the petition in which all 
parties join, on the general ground that the court 
has no authority to review the action of the Com¬ 
mission in the premises. 

The exact position taken by the Commission 
with regard to the petitioners’ claim for reparation 
is best shown by what it has to say of it. After 
finding that the eighty-five cent rate complained 
of was an unreasonable rate and that seventy- 
five cents at most was just and reasonable and for 
two years thereafter not to be exceeded, and hav¬ 
ing also considered whether the shippers had in 
fact been damaged, the excess rate as it was con¬ 
tended having been added to the price at which the 
lumber was sold and paid for by the consumers, 
which contention was negatived, the Commission, 
speaking by Mr. Commissioner Prouty, says: 

“ These complainants were shippers of hard¬ 
wood lumber to this destination, and they were 
entitled to a reasonable rate from the defendants 
for the service of transportation. An unreasonable 


278 CASES BROUGHT IN THE COMMERCE COURT. 

rate was in fact exacted. They were thereby de¬ 
prived of a legal right, and the measure of their 
damage is the difference between the rate to which 
they were entitled and the rate which they were 
compelled to pay. If complainants were obliged 
to follow every transportation to its ultimate result 
and to trace out the exact commercial effect of the 
freight rate paid, it would never be possible to show 
damages with sufficient accuracy to justify giving 
them. Certainly these defendants are not entitled 
to this money which they have taken from the com¬ 
plainants, and they ought not to be heard to say 
that they should not be required to refund this 
amount because the complainants themselves may 
have obtained some portion of this sum from the 
consumer of the commodity transported. ’ ’ 

It was thus distinctly found that an unreasonable 
rate had been exacted by the carrier; that thereby 
the shippers were deprived of a legal right; and 
that they had been damaged the difference between 
what they had been compelled to pay and that 
which was just and reasonable. And from this it 
would seem to follow that they were entitled to rep¬ 
aration for that which had thus been unlawfully re¬ 
quired of them, the refusal of which relief by the 
Commission amounted to the denial of a legal right 
where it should have been upheld. The Commis¬ 
sion meets the situation, however, as follows: 

“ Neither,” as it is said in the report, “ should 
these complainants be permitted to slumber upon 


CASES BROUGHT IN THE COMMERCE COURT. 279 

their rights and to accumulate against these de¬ 
fendants a claim for damages which may not repre¬ 
sent in its entirety an actual loss to the complainants. 
The burden of an unjust freight rate usually rests 
upon the consumer, who cannot and does not re¬ 
cover. Claims for reparation should therefore be 
promptly presented and actively prosecuted. We 
shall allow the complainants reparation in this case 
in the amount of the difference between the rate 
actually paid and the rate of seventy-five cents, 
which is established and which is found to have been 
a reasonable rate from the date of the filing of this 
petition, but, following the case of Thompson v. Illi¬ 
nois Central R. R., no reparation will be allowed 
by reason of shipments made previous to the date 
of the filing of the complaint. ” 

The Commission, in other words, after finding all 
the elements of a just and legal claim in favor of 
the petitioners against the carriers which have in¬ 
tervened, has denied reparation as to anything pre¬ 
ceding the filing of the complaint, on the ground 
that in its opinion the petitioners were guilty of 
laches. Upon what considerations laches is predi¬ 
cated, other than delay, is not indicated. But 
without dwelling upon this the fact remains that, 
in the face of the admitted showing made, repara¬ 
tion was refused as to shipments before the com¬ 
plaint was filed, although allowed after that date, 
a distinction for which there is no apparent sanc¬ 
tion. Having made out a complete prima facie 


280 CASES BROUGHT IN THE COMMERCE COURT. 

legal claim the petitioners were entitled to have it 
recognized and sustained to its full extent, and 
reparation awarded accordingly. No doubt the 
claim was subject to the limitation imposed by the 
statute (sec. 16), by which complaints of this char¬ 
acter must be filed with the Commission within two 
years from the time when the cause of action ac¬ 
crues, whatever be the construction given to that 
provision. Arkansas Fertilizer Go. v. United 
States, not yet reported. But there is nothing to 
sustain the idea that any part of it could be thrown 
out upon the equitable ground of laches. The 
plain question presented in every application for 
reparation is whether the rate which has been 
charged is reasonable or unreasonable; and if un¬ 
reasonable, the extent to which it is so. On this 
both the shipper and the carrier are entitled to an 
explicit finding; this, if found in favor of the ship¬ 
per, being the foundation of his cause of action. 
Texas & Pacific R. R . v. Abilene Oil Co., 204 U. S., 
437. Morrisddle Goal Go. v. Penn. R. R., 183 Fed., 
929. Robinson v. Balt. & Ohio R. R., decided by 
the Sup. Ct. Jan. 9, 1912, not yet reported. And, 
except possibly to determine the shipments to 
which the rate which is condemned applies, and the 
number of tons or pounds, or however the freight 
is measured, in order to get at the gross over pay¬ 
ment and award damages accordingly, the duty of 
the Commission ends with this finding. It can 
add nothing to the case which is so made out nor 


CASES BROUGHT IN THE COMMERCE COURT. 281 

detract anything from it. The prima facie right 
of the shipper to reparation at the hands of the 
carrier, with these facts found in the shipper’s 
favor, is thereby established, and the rest is for the 
courts, in case the order of the Commission is not 
accepted and complied with. It is not for the 
Commission to consider and pass upon other ques¬ 
tions which may arise, by which the ultimate right 
to recover may be affected. It does not try out the 
case on its merits, but only the one particular 
phase of it. And above all is not the Commission 
empowered to restrict the operation of a claim in 
all respects valid on its face upon the supposed 
applicability of some equitable doctrine, such as 
laches. 

In the present instance the order of the Com¬ 
mission, limiting the reparation allowed to ship¬ 
ments after the complaint was filed, is the result 
of a clear misapprehension of the law, which ren¬ 
ders it invalid. St. Louis Hay & Grain case, 214 
U. S., 297. Stickney case, 215 U. S., 98. Willa¬ 
mette Valley case, 219 U. S., 433. Inter . Com. 
Commission v. Union Pacific E. E., decided by the 
Sup. Ct. Jan. 9,1912, not yet reported. As already 
stated, the petitioners, judged by the Commission’s 
own report, apparently made out a perfectly legal 
claim, not only as to shipments after the complaint 
but also as to those before it. The right to repara¬ 
tion, in view of this, can not be limited, as has been 
done, to that which accrued after the complaint was 


282 CASES BROUGHT IN THE COMMERCE COURT. 

filed. The petitioners are entitled to go back of 
that, so far at least as concerns the proceedings before 
the Commission, until barred by the statute; and to 
have the merits of their claim considered and passed 
upon unhampered by any mistaken view to the con¬ 
trary. The petition therefore on its face sets forth 
a good case for relief, and there is no ground for 
the demurrer. 

The demurrer tvill be overruled and the respond¬ 
ents directed to answer over. 


United States Commerce Court. 

No. 19. —October Session, 1911. 


Thompson Lumber Company 

v . 

Interstate Commerce Commission, respondent; 
and United States, and Illinois Central Rail¬ 
road Company, intertoners. 


on demurrer to petition. 

For opinion of Interstate Commerce Commission 
see 13 Inter. Com. Com. Rep., 657. 

Mr. W. A. Percy for petitioners. 

Mr. P. J. Farrell for Interstate Commerce Com¬ 
mission. 

Mr. James A. Fowler , assistant to the Attorney 
General, and Mr. Blackburn Esterline , special as¬ 
sistant to the Attorney General, for the United 
States. 

Mr. E. Walton Moore and Mr. Frank W. Givath- 
mey for Illinois Central Railroad Company. 

Before Knapp, Presiding Judge, and Archbald, 
Hunt, Carland, and Mack, Judges. 

283 




284 CASES BROUGHT IN THE COMMERCE COURT. 


[February 13,1912.] 

Archbald, Judge: 

This case does not differ in principle from that of 
Russe & Burgess just decided. Indeed the two are 
linked together by the Commission, the decision in 
the one on the subject of laches being given as a rea¬ 
son for the decision in the other. 

The rate complained of before the Commission 
was that on hardwood lumber from Memphis to 
New Orleans for export. The rate charged was 
twelve cents a hundred pounds, and complaint was 
made against the Illinois Central Railroad, the 
Yazoo & Mississippi Valley Railroad, and the St. 
Louis, Iron Mountain & Southern Railroad, these 
being the three lines by which shipments of such 
lumber are made between the points mentioned at 
the rate in question. The Commission dismissed the 
complaint as to the St. Louis, Iron Mountain & 
Southern, but held that as to the Illinois Central 
and the Yazoo & Mississippi Valley the twelve-cent 
rate was unreasonable, ten cents per hundred 
pounds being fixed as the maximum. The Yazoo & 
Mississippi Valley was not served in the present 
case and has not appeared, and the case therefore 
proceeds only against the Illinois Central. 

As to the reparation claimed on the ten-cent 
basis, the Commission said: 


CASES BROUGHT IN THE COMMERCE COURT. 285 

“ We can not award damages in this case based 
upon the use of the twelve-cent rate up to the 
date of the filing of the complaint because of the 
laches of the complainants and because the 
record does not conclusively disclose that the rate 
was unreasonable prior to said date. The questions 
of law as to the reparation and the amount thereof 
under the above ruling will be reserved for con¬ 
sideration at a later date.” 

Not satisfied with the situation in which the case 
was so left, the petitioners applied for a rehearing 
and modification of the order, assigning among 
other things that the Commission erred in the rul¬ 
ing made, it being urged in that connection in the 
brief filed that there was no place for the applica¬ 
tion of the doctrine of laches, nor for any limita¬ 
tion other than that imposed by the statute, and 
that in holding the petitioners to conclusively prove 
the unreasonableness of the rate prior to the filing 
of the complaint the Commission was enforcing a 
degree of proof not justified upon any principle. 
But notwithstanding this, and with its attention 
thus called to the matter, the Commission in a fur¬ 
ther report declined to modify the order. The 
present bill was then filed, the same as in the Russe 
& Burgess case, in the Circuit Court of the United 
States for the Northern District of Illinois, and 
after the same intermediate proceedings comes up 
now on demurrer by the Interstate Commerce Com¬ 
mission joined in by the United States and the 
Illinois Central Railroad intervening. 


286 CASES BROUGHT IN THE COMMERCE COURT. 

Nothing need be added to what is said in the 
Russe & Burgess case on the subject of laches. So 
far as the action of the Commission in refusing 
complete reparation is based on the application of 
that doctrine to shipments which preceded the fil¬ 
ing of the complaint, it is clearly invalid. 

The other ground assigned by the Commission 
for its action, in our judgment, is equally untenable. 
To require conclusive proof of the unreasonable¬ 
ness in the past of the rate complained of was to set 
up a standard which is exacted, if ever, in only the 
most extreme cases. 44 Where an adverse presump¬ 
tion is to be overcome, or, on grounds of public 
policy and in view of peculiar facilities for perpe¬ 
trating injustice by fraud and perjury, a degree of 
proof is sometimes required which is variously des¬ 
ignated as 4 clear, ’ 4 clear and conclusive, ’ 4 clear, 
precise, and indubitable/ 4 convincing,’ 4 un¬ 
equivocal,’ &c.” 17 Cycl., 771. Conclusive evi¬ 

dence is that which is incontrovertible—that is to 
say, either not open or not able to be questioned. 
Wood v. Chapin , 19 N. Y., 509, 515. Where it is 
said that a thing is conclusively proved, it means 
that that result follows from the facts shown as the 
only one possible. People v. Stephens, 13 N. Y., 
Supp., 1112, 1114. Conclusive proof means either 
a presumption of law, or evidence so strong as to 
overbear everything to the contrary. Hanpt v. 
Pohlman, 24 N. Y. Sup. Ct., 121,127. 

In a civil action the complainant is never bound 

rlo more than sustain his case by a preponder- 


CASES BROUGHT IN THE COMMERCE COURT. 287 


ance of the credible evidence. Louis. & Nash. R. R. 
v. Jones, 83 Ala., 376. Ford v. Chambers, 19 Cal., 
143. Treadwell v. Whittier, 80 Cal., 574. Williams 
v. Watson, 34 Mo., 95. Strauss v. Field, 90 N. Y., 
640. Crabtree v. Reed, 50 Ill., 206. McDeed v. 
McDeed, 66 Ill., 545. Graves v. Cowell, 90 Ill., 612. 
To instruct a jury that they must be conclusively 
convinced is a manifest error. Hiester v. Laird, 
1 W. & S., 245. 

In the case in hand it was only necessary for the 
petitioners to show by a preponderance of proof 
that the rate in the past—as it was found by the 
Commission that it would be for the future—was 
not a just or reasonable rate; and if they did this, 
it was all that could be required of them. No doubt 
the Commission had the right to call for proof that 
was reasonably convincing. But it had no right 
to array itself against that which was produced, to 
the extent of holding that it was not conclusive; 
which was in effect saying that nothing short of 
what was incontrovertible would satisfy it. 

Nor can this be passed over as an inadvertence 
or as meaning no more than that the evidence so 
far as concerned the past was not satisfactory. If 
this was all there was to the case of course nothing 
could be made of it. But by the petition for a re¬ 
hearing and the argument that was made in that 
connection the attention of the Commission was 
directly called to the effect of the ruling, and after 
due consideration it was adhered to. If therefore 
the matter was left in any doubt by the original 


288 CASES BROUGHT IN THE COMMERCE COURT. 

report there can be none by the later one. By the 
express reiteration of the former ruling it was 
thereby declared, not that the evidence was not 
satisfactory or unconvincing, but that it was not 
conclusive, and that none other would be sufficient. 
This was asking more of the petitioners than was 
warranted, and the action of the Commission in 
refusing reparation as to the past upon that 
ground is invalid. 

It is said, however, that the question of repara¬ 
tion was reserved for further consideration, and 
that there is therefore nothing final. But accord¬ 
ing to the report the only reservation was of the 
question of law as to the amount of reparation to 
which the parties were entitled under the ruling 
made, which in no respect relieves the situation. 
As already said in the Russe & Burgess case the pe¬ 
titioners were entitled to have the resaonableness 
or unreasonableness of the rate in controversy con¬ 
sidered and determined fairly and squarely upon 
the merits, unhampered by any misconception as to 
the extent or character of proof required of them, 
and they are now entitled to be relieved from the 
adverse result under which they rest, which has 
been brought about by the error complained of. 
As the case stands they have applied for relief and 
been put off with only a part of that which they 
claim, the rest having been ruled out on a clear mis 
apprehension. 

The demurrer is overruled tvith leave to the 
respondents to answer over . 


United States Commerce Court. 

April Term, 1911. 


Goodrich Transit Company, petitioner," 


v. 


The Interstate Commerce Commission, 
respondent. The United States, inter¬ 
vening respondent. 


^No. 2L 


Goodrich Transit Company, petitioner," 
v. 

The Interstate Commerce Commission, l 
respondent. The United States, inter¬ 
vening respondent. 


No. 22. 


White Sta^r Line, a corporation, peti- 
tioner, 


v . 

The United States, respondent. The 
Interstate Commerce Commission, in¬ 
tervening respondent. 


fNo. 23. 


White Star Line, a corporation, peti-" 
tioner, 


v. 

The United States, respondent. The 
Interstate Commerce Commission, in¬ 
tervening respondent. 


fNo. 24. 


Ralph M. Shaw, solicitor for petitioners. 

J. A. Fowler, Assistant Attorney General, and 
Charles W. Needham, solicitor for Interstate 
Commerce Commission, for respondents. 

48250—S. Doc. 789, 62-2-19 


289 







290 CASES BROUGHT IN THE COMMERCE COURT. 

Before Knapp, Presiding Judge, and Archbald, 
Hunt, Carland, and Mack, Judges. 

[October 5, 1911.] 

Hunt, Judge: 

No. 21. 

The Goodrich Transit Co., a corporation organ¬ 
ized under the laws of Maine, filed this bill in equity 
on December 29, 1910, in the Circuit Court of the 
United States for the Northern District of Illinois, 
eastern division, to obtain an injunction against the 
enforcement of certain orders of the Interstate 
Commerce Commission. For the sake of brevity, 
we will hereafter refer to the Goodrich Transit Co. 
as the transit company, and to the Interstate Com¬ 
merce Commission as the commission. 

It appears from the bill that the transit company 
has its principal operating office in Chicago, Ill., 
and since its organization in 1906 has been engaged 
in the transportation of passengers and freight on 
Lake Michigan, Lake Huron, and the rivers tribu¬ 
tary thereto. It owns and operates steamers and 
dock properties in Illinois, Wisconsin, and Michi¬ 
gan, several of such dock properties being near the 
mouths of rivers. The docks are used as landing 
places, where freight and passengers are discharged 
and taken off. The steamers carry passengers and 
freight originating at ports of the States of Michigan, 
Wisconsin, and Illinois, and destined to ports in 
each of the said States. This transportation is 
entirely by water and unconnected with any land 


CASES BROUGHT IN THE COMMERCE COURT. 291 

transportation whatever, and is spoken of as “ port- 
to-port” interstate business. The transit company’s 
steamers also carry passengers and freight originat¬ 
ing at and destined to ports in the same State, and 
not passing out of said State en route, and this 
business is spoken of as “ port-to-port” intrastate 
business. 

The bill alleges that the transit company had 
voluntarily agreed with some of the interstate rail¬ 
road carriers of the United States to establish cer¬ 
tain through routes over which passengers and 
freight were being carried under joint tariffs, and 
that for the purpose of establishing such through 
routes it had voluntarily filed with the commission 
its joint tariffs or its concurrence in tariffs filed by 
such railroad carriers, and that the transit com¬ 
pany’s steamers carry for hire passengers and 
freight under said joint tariffs over the water por¬ 
tion of said through routes. It is alleged with some 
detail that the principal part of the business of the 
transit company is derived from its port-to-port 
and intrastate business and that competition is 
active and open to any who may desire to engage in 
such business, which includes the privilege of the 
use of docking and terminal facilities. The bill 
alleges that on June 11, 1910, the commission en¬ 
tered the following order: 

It is ordered , That Special Report Series Circular 
No. 10, prepared under the direction of this Com¬ 
mission by Henry C. Adams, in charge of Statistics 
and Accounts, be, and the same is hereby, approved; 


292 CASES BROUGHT IN THE COMMERCE COURT. 

that a copy of the said Special Report Series Circular 
No. 10 be sent to each and every carrier by water 
within the jurisdiction of this Commission; that each 
and every of the said carriers by water be required 
to make full and true answers to the several inquiries 
contained in the said Special Report Series Circular 
No. 10, and to verify its said answers by the oath of 
the president or other principal officer of such com¬ 
pany, and that the said oath be in the form provided 
in the said Special Report Series Circular No. 10.” 

Attached to the petitioner’s bill is a copy of the 
Special Report Series Circular No. 10, referred to in 
the order of the commission, dated June 11, 1910, to 
which said special report we shall have occasion 
hereafter to refer. 

Service of the order is alleged to have been made 
and notification was given that unless answers to 
the questions propounded in the special report were 
made before December 31, 1910, the transit company 
would be liable to the penalties prescribed in section 
20 of the act to regulate commerce, as amended by 
the act approved June 18, 1910. 

The petitioner avers that the interrogatories con¬ 
tained in the special report just referred to made 
no distinction between the business transacted by 
the transit company, which was solely intrastate 
business, and that transacted which was wholly 
port-to-port business, and that which was the result 
of joint rail and water routes, to which the transit 
company became a voluntary party; and it is al¬ 
leged that, inasmuch as the transit company had vol- 


CASES BROUGHT IN THE COMMERCE COURT. 293 

untarily become a party to the joint rail and water 
routes referred to, the commission insisted that it 
had jurisdiction over all the business of the transit 
company without regard to its nature or the places 
between which it was transacted. The bill sets up 
that since the creation of the commission in 1887, 
never, prior to the entry of the order above referred 
to, had the commission required any reports from 
water carriers generally, or any report of any kind 
from this particular petitioner. 

It is further alleged that the commission, on Jan¬ 
uary 7, 1909, construed the act to regulate commerce 
as subjecting carriers of interstate commerce by 
water to the provisions of the act only in respect to 
traffic transported under a common control, man¬ 
agement, or arrangement with a rail carrier. 

It is set forth that the inquiries made by the com¬ 
mission were not for the purpose of exacting evi¬ 
dence under any complaint filed for violation of the 
act to regulate commerce or for the purpose of 
making investigations that might have been made 
the object of a complaint; that a large number of 
the questions propounded in the special report 
called for pertained solely to the internal affairs of 
the company, and that it is impossible to answer 
them without reporting to the commission details 
in connection with the internal management of the 
business of the transit company; and it is pleaded 
that the commission has no constitutional authority 
to regulate or to inquire into the internal affairs of 
the transit company, and is without power to regu- 


294 CASES BROUGHT IN THE COMMERCE COURT. 

late commerce which is wholly intrastate or to make 
inquiries respecting commerce which is wholly intra¬ 
state. 

The order of the commission is alleged to be void 
because of lack of power in the commission, and be¬ 
cause to enforce the order would be a violation of 
the fourth amendment to the Constitution of the 
United States, prohibiting unreasonable searches 
or seizures, and because the information sought by 
the inquiries is a property right, and because to en¬ 
force the order of the commission would be to take 
the property of the transit company without com¬ 
pensation and without due process of law. 

The relief prayed for is an interlocutory order 
suspending the order of the commission and re¬ 
straining that body from taking any steps to en¬ 
force the order, and that upon final hearing the 
order of the commission should be annulled. There 
is a further prayer to the effect that if, however, it 
should be found that the commission had authority 
to require an answer to any of the questions con¬ 
tained in the report No. 10, referred to, upon final 
hearing the court would enter an order specifically 
designating such questions in said report as the 
commission could lawfully require to be answered, 
and that the commission be restrained from at¬ 
tempting to enforce answers to any questions not 
included in the designation made by the court. 

The commission interposed a demurrer, based 
upon the ground that the bill failed to state any 
equity. The Circuit Court for the Northern Dis- 


CASES BROUGHT IN THE COMMERCE COURT. 295 

trict of Illinois, eastern division, upon December 
31, 1910, stayed the order of the commission until 
the further order of the court. 

After the opening of the United States Com¬ 
merce Court, and pursuant to section 6 of the act 
to create the said court, the case was transferred, 
and is now here to be proceeded with as may be 
proper. 

By leave had the United States has intervened 
and filed an answer, admitting the allegations of 
fact contained in the bill, but setting forth that the 
requirements made by the orders of the commission 
do not make distinction between the books which 
petitioner might keep and its method of accounting 
for its income and expenses in connection with its 
interstate business and its port-to-port business, as 
separate from its business as a result of its joint 
rail and water routes, because (1) while the income 
from each of the different kinds of business stated 
in the bill can be ascertained with reasonable accu¬ 
racy, yet it is impossible to determine with any 
substantial degree of accuracy the expenses in¬ 
curred in either of them, as separate and distinct 
from those incurred in the others, and (2) because 
it is essential that the commission be informed as 
to the total income derived by the transit company, 
in order that the commission might determine what 
are reasonable and just rates to be charged by 
petitioner in its joint rail and water business, and 
to determine whether it complies with the pro¬ 
visions of the law regulating interstate commerce. 


296 CASES BROUGHT IN THE COMMERCE COURT. 

The United States also sets up that the system 
of bookkeeping devised by the commission is the 
result of long experience and well adapted to the 
preservation of data for the information of the 
commission, and that in the absence of a method 
prescribed by the commission a carrier might 
manipulate its books and reports in a way to con¬ 
ceal rather than to reveal the true state of its busi¬ 
ness, and that it is of vital importance to the com¬ 
mission to have the information called for in the or¬ 
der in order that it may perform its duties as pro¬ 
vided by the terms of the act to regulate commerce. 

No. 22. 

This suit was also brought in the Circuit Court 
of the United States for the Northern District of 
Illinois, eastern division. 

The Goodrich Transit Co., the same corporation 
referred to in case No. 21, after alleging substan¬ 
tially the same matters with respect to its incor¬ 
poration and business as it had set forth in the 
averments in the bill filed in case No. 21, alleges 
that on May 31, 1910, the Interstate Commerce Com¬ 
mission, acting under the authority claimed under 
section 20 of the act to regulate commerce, approved 
June 16, 1906, entered two certain orders relating to 
the subject of a uniform system of accounts to be 
prescribed for and kept by carriers by water. One 
of the orders prescribed that the classification of 
operating revenue of such carriers and the text per¬ 
taining thereto, prepared under the direction of 


CASES BROUGHT IN THE COMMERCE COURT. 297 

the commission, should govern in the keeping and 
recording of operating revenue accounts, and that 
the rules contained in what was known as the first 
issue of the classification of operating revenues of 
carriers by water should apply to the keeping and 
recording of such operating accounts, and that it 
should be unlawful for any such water carrier or 
for any person directly in charge of the accounts of 
such carrier to keep any account or record or mem¬ 
orandum of any operating revenue items except in 
the manner and form as set forth and prescribed, 
and except as authorized by the commission. 

It was further ordered that any such carrier 
might subdivide any primary account in the first 
issue as might be required for the purposes of such 
carrier, or might make any assignment of the 
amount credited to any such primary account of 
operating divisions to its individual lines or estates, 
provided that a list of such subprimary accounts 
set up or such assignments made by any such car¬ 
rier should be first filed in the office of the commis¬ 
sion. The order also provided that the carrier, in 
addition to the operating revenue accounts pre¬ 
scribed by the commission, might keep any tempo¬ 
rary or experimental accounts, the purpose of 
which should be to develop the efficiency of opera¬ 
tion, but that such temporary or experimental 
accounts should not impair the integrity of any 
general or primary account prescribed by the order 
of the commission. January 1, 1911, was the date 
upon which the order was to become effective. 


298 CASES BROUGHT IN THE COMMERCE COURT. 

The other order made was with respect to the 
classification of operating expenses of carriers by 
water. Classification was to be made pursuant to 
rules prescribed by the commission and embodied 
in a printed form known as the first issue. It was 
ordered that the classification of operating ex¬ 
penses as prescribed should govern in keeping and 
recording operating-expense accounts, and that the 
rules prescribed should be those according to which 
the operating expenses are defined; and the car¬ 
riers were required to conform to the rules, and it was 
made unlawful for carriers to keep any accounts 
or records or memoranda of any operating-expense 
item except as set forth and prescribed in the man¬ 
ner and form laid down in the pamphlet called the 
first issue. The carriers were authorized to sub¬ 
divide any primary accounts as might be required 
for ‘'the purposes of such carrier, or might make 
certain assignments of the amount charged to such 
primary account, provided that a list of such sub¬ 
primary accounts or assignments should be first 
filed with the commission. Authority was also 
given to the carrier to keep any temporary or ex¬ 
perimental accounts, the purpose of which was to 
develop the efficiency of operation, but such tempo¬ 
rary or experimental accounts were not to impair 
the integrity of any general or primary accounts as 
prescribed by the commission, and such temporary 
or experimental accounts were required to be open 
for inspection by the commission. The date upon 


CASES BROUGHT IN THE COMMERCE COURT. 299 

which this order was to be effective was January 1, 

1911. 

The petitioner alleges that two pamphlets, one 
entitled “ The classification of operating revenues 
of carriers by order as prescribed by the Interstate 
Commerce Commission/’ etc., and the other of 
which was entitled “The classification of operating 
expenses of carriers by water, as prescribed by the 
Interstate Commerce Commission,” etc., were 
served upon it, and it is alleged that the bookkeep- 
. ing methods prescribed by the order of the com¬ 
mission differ widely from those used by petitioner, 
and that in order to comply with the requirements 
of the commission, petitioner will have to open a 
completely new set of books and change its methods 
of accounting, all of which would entail annoyance 
and expense. 

It is averred that the commission has notified the 
petitioner that, beginning with January 1, 1911, a 
new set of books must be opened, which must con¬ 
form to the methods prescribed with respect to all 
of its business, including its intrastate business, its 
port-to-port interstate business, and its business as 
a part of joint routes with rail carriers, and that in 
the event of a failure to conform its books and 
methods of accounting to the requirements pre¬ 
scribed, it will be subject to the penalties prescribed 
in section 20 of the act to regulate commerce. 

Petitioner avers that the requirements make no 
distinction between the books which petitioner may 


300 CASES BROUGHT IN THE COMMERCE COURT. 

keep and its method of accounting for its income 
and expenses in connection with its intrastate busi¬ 
ness, its port-to-port business, and the business 
which is transacted by petitioner as the result of the 
joint rail and water routes to which the petitioner 
has become voluntarily a party. It is averred that 
the act to regulate commerce, as amended in June, 
1906, conferred upon the commission the same 
authority that it now claims to exercise with respect 
to the books and accounts of water carriers gen¬ 
erally, and that though petitioner and other water 
carriers have voluntarily agreed with some inter¬ 
state carriers by railroad to establish a limited 
number of through routes over which passengers 
or property have been transported by a continuous 
carriage, and have filed tariffs therefor with the 
Interstate Commerce Commission, yet the commis¬ 
sion never before has claimed that petitioner or 
other water carriers subjected themselves to all of 
the provisions of the act to regulate commerce or 
the provisions of section 20 thereof. 

It is alleged that under the Constitution of the 
United States no power was conferred upon Con¬ 
gress to regulate in any method whatsoever the 
internal affairs of any corporation organized under 
the law T s of a State, and that no power was conferred 
upon Congress to delegate to the commission the 
right to regulate in any method whatsoever the 
internal affairs of any corporation organized under 
the laws of a State, and that no power was conferred 
upon Congress to regulate any commerce which is 




CASES BROUGHT IN THE COMMERCE COURT. 301 

wholly intrastate, and that Congress did not confer 
upon the commission the right to regulate all or any 
part of the business of petitioner which was solely 
port-to-port business, either interstate or intrastate, 
and that the commission is without power to pre¬ 
scribe the bookkeeping methods of petitioner with 
respect either to its intrastate business or its port-to- 
port business. 

Petitioner, while denying that either the Con¬ 
gress or the commission has any authority over the 
bookkeeping methods of petitioner with respect 
either to its income or its disbursements, avers that 
such jurisdiction, if any, as the commission has 
over the bookkeeping methods of petitioner is lim¬ 
ited solely to bookkeeping methods with respect to 
the income and disbursements of petitioner in con¬ 
nection with its joint rail and water business, and 
that the methods prescribed by the commission are 
not reasonably adapted to the purpose of furnish¬ 
ing to the commission any information with respect 
to the revenue or disbursements of petitioner re¬ 
lating to its joint rail and water business. 

It is also alleged that the methods prescribed 
would not enable the commission to pass upon the 
justness or fairness of any existing or proposed 
rate, classification, or practice of petitioner in con¬ 
nection with its joint rail and water business, or in 
connection with the existence or establishment of 
any through route, joint classification, or division of 
receipts upon such joint rail and water business. 


302 CASES BROUGHT IN THE COMMERCE COURT. 

It is further averred that it is possible to estab¬ 
lish a method of bookkeeping by means of which 
the income and disbursements from the joint rail 
and water business of petitioner would be segre¬ 
gated, and that by the methods prescribed in the 
orders provision is not made for the segregation of 
the joint rail and water business from the peti¬ 
tioner’s port-to-port business or intrastate business. 

It is also averred that the right of the petitioner 
to keep its books in a way which shall seem to it 
appropriate is a property right, and that the de¬ 
privation of such right is a violation of the fifth 
amendment to the Constitution of the United 
States. 

It is alleged that the orders as made are not regu¬ 
lations of interstate commerce, and that if section 
20 of the act to regulate commerce is construed as 
it has been by the commission it will be the taking 
of petitioner’s property without compensation and 
without due process of law. 

The prayer is that a temporary order may be 
entered, suspending the orders of the commission, 
and restraining the commission from taking any 
steps to enforce the orders, and that upon final 
hearing decree may be entered annulling and sus¬ 
pending the said orders and enjoining the commis¬ 
sion from taking any steps toward the enforcement 
* f said orders. A further prayer is that if, in the 
judgment of the court, the orders of the commission 
are lawful in any respect, the court shall say what 
requirements petitioner shall be obliged to live up to, 


CASES BROUGHT IN THE COMMERCE COURT. 303 

and that injunction be issued restraining the com¬ 
mission from enforcing the order with respect to any 
matters not lawfully included within the order of the 
court. 

The commission demurred to the petition, the 
demurrer being based upon the ground that the bill 
failed to state any equity and that the allegations 
did not show that the legislative department of the 
Government was without authority to grant the 
power exercised by the commission in making the 
orders of May 31, 1910, and that the petition does 
not show that there is any violation of any constitu¬ 
tional or other right of the petitioner. 

The United States filed an answer, admitting 
every allegation of fact contained in the petition, 
except as follows: It admits that while no distinc¬ 
tion has been made between petitioner’s income and 
expenses in connection with its interstate business 
and intrastate business, such distinction was not 
made because while the income from the different 
kinds of business stated in the petition can with 
reasonable accuracy be ascertained, yet it is impos¬ 
sible to determine with any substantial degree of 
accuracy the expenses incurred in either of said 
kinds of business as separate and distinct from the 
others, and because it is essential that the commis¬ 
sion know the total income derived by petitioner 
from all its investments and sources, in order that 
the commission may determine what are reasonable 
and just rates to be charged by petitioner in its 
joint rail and water business, and to determine 


304 CASES BROUGHT IN THE COMMERCE COURT. 

whether it is complying with the provisions regu¬ 
lating interstate commerce. The answer, while ex¬ 
pressly admitting allegations of fact contained in 
the petition, does not admit but denies inferences of 
fact from particular facts alleged and conclusions 
of law insisted upon in the petition. 

The Circuit Court of the Northern District of 
Illinois stayed the order of the commission, and the 
case, like No. 21, was thereafter transferred to this 
court. 

No. 23 and No. 24. 

These are petitions filed originally in this court 
by the White Star Line against the United States, 
wherein petitioner attacks the validity of the same 
orders specified in the two preceding cases, and 
seeks to restrain their enforcement. The allegations 
of the petitions are very similar to those already set 
forth in the petitions of the Goodrich Transit Co. 
It is averred herein, however, that the White Star 
Line, in addition to its transportation business, owns 
two amusement parks, both situated within the 
State of Michigan; that in connection with the said 
parks it owns, operates, and derives revenue from 
lunch stands, merry-go-rounds, bowling alleys, bath¬ 
houses, souvenir stands, photograph stands, boat 
liveries, and launch ferries, and that admission fees 
are collected from people who enter said amusement 
parks. The petitioner alleges that the commission 
had no power to regulate the books or to demand the 
reports which were kept with respect to the conduct 


CASES BROUGHT IK THE COMMERCE COURT. 305 

of its amusement parks, the business of keeping said 
parks being separate and distinct from the trans¬ 
portation business of the petitioner. 

It appears that the White Star Line owns and 
operates steamers which run from Toledo, Ohio, 
through Lake Erie, Detroit River, Lake Sinclair, 
and Sinclair River to Port Huron, in Michigan. 
The steamers stop to load and unload passengers 
and freight at many points in the State of Michi¬ 
gan and in the Dominion of Canada, between Toledo 
and Port Huron. The transportation is entirely 
by water and unconnected with any land trans¬ 
portation whatever, but it is alleged that the peti¬ 
tioner has voluntarily agreed with some of the 
interstate railroad carriers of the United States 
to establish certain through routes over which pas¬ 
sengers and freight are carried under joint tariffs, 
and that for the purpose of establishing such 
through routes it has voluntarily filed with the 
commission its joint tariffs or its concurrence in 
tariffs filed by said railroad carriers, and that the 
steamers of the petitioner carry for hire passen¬ 
gers and freight under said joint tariffs over the 
water portion of said through routes. 

The orders of the commission, as in the cases 
Nos. 21 and 22, relate to the making of reports to 
the commission, and to the keeping of uniform ac¬ 
counts, as required by the rules laid down by the 
commission, and to which reference has already 
been made in the statement of the two preceding 
cases. 

48250—S. Doc. 789, 62-2-20 


306 CASES BROUGHT IN THE COMMERCE COURT. 

The petitioner in these cases, as in the preceding 
ones, avers that the commission caused to be served 
upon it two pamphlets, one entitled “The classi¬ 
fication of operating revenues by carriers by water” 
and the other entitled “The classification of operat¬ 
ing expenses of carriers by water.” It is alleged 
that the bookkeeping methods prescribed by the com¬ 
mission differ from those used by the petitioner, and 
that in order to comply with the order of the commis¬ 
sion petitioner would have to open a completely new 
set of books and change its methods of accounting. 

It is also alleged that the requirements include 
the business of petitioner relating to its amusement 
parks, its intrastate business, its port-to-port intra¬ 
state and international business, and its business as 
a part of joint routes with rail carriers. Petitioner 
denies the authority of the commission to make any 
such orders, and for reasons substantially similar 
to those relied upon in the bills filed by the Good¬ 
rich Transit Co., already referred to, pleads lack of 
power in the commission, and assails the constitu¬ 
tionality of the orders. 

The United States filed answers to the petitions, 
admitting the allegations of fact contained in the 
petitions, but alleging that the parks and things con¬ 
nected with the parks constitute a part of the peti¬ 
tioner’s general property, and are operated in con¬ 
nection with and for the purpose of promoting its 
interstate business. The answers also set up that 
the method of bookkeeping prescribed by the com¬ 
mission is reasonable and just, and that it is impos¬ 
sible to determine what are reasonable and just rates 


CASES BROUGHT IN THE COMMERCE COURT. 307 


to be charged by petitioner in its joint rail and water 
business unless a method of bookkeeping such as is 
prescribed is put into use. 

The Interstate Commerce Commission filed mo¬ 
tions to dismiss the several petitions upon the ground 
that the facts stated therein did not entitle petitioner 
to any relief. 

The four cases were argued together, upon an 
understanding between counsel for the respective 
parties that the essential questions were presented 
by the demurrers and motions to dismiss. The cases 
were, therefore, heard as upon general demurrers 
and motions, and without regard to the answers 
filed by the United States. 

This statement is sufficient to an understanding 
of the cases, and although there are separate rec¬ 
ords, we shall treat them as if they were but one 
proceeding before the court. 

The commission made its call for the reports and 
its orders prescribing uniformity of accounts which 
are objected to by the carriers, under what it claims 
is authority conferred by section 20 of the act to 
regulate commerce. The section is appended.® Act- 


a Sec. 20. (As amended June 29, 1906, February 25, 1909, and June 18, 
1910.) That the Commission is hereby authorized to require annual re¬ 
ports from all common carriers subject to the provisions of this Act, and 
from the owners of all railroads engaged in interstate commerce as defined 
in this Act; to prescribe the manner in which such reports shall be made, 
and to require from such carriers specific answers to all questions upon 
which the commission may need information. Such annual reports shall 
show in detail the amount of capital stock issued, the amounts paid there¬ 
for, and the manner of payment for the same; the dividends paid, the sur¬ 
plus fund, if any, and the number of stockholders; the funded and floating 
debts and the interest paid thereon; the cost and value of the carrier’s 
property, franchises, and equipments; the number of employees and the 
salaries paid each class; the accidents to passengers, employees, and other 
persons, and the causes thereof; the amounts expended for improvements 



308 CASES BROUGHT IN THE COMMERCE COURT. 


ing under its terms the commission in detail has pre¬ 
scribed classification of operating expenses and reve- 


each year, how expended, and the character of such improvements; the 
earnings and receipts from each branch of business and from all sources; 
the operating and other expenses; the balances of profit and loss; and a 
complete exhibit of the financial operations of the carrier each year, in¬ 
cluding an annual balance sheet. Such reports shall also contain such 
information in relation to rates or regulations concerning fares or freights, 
or agreements, arrangements, or contracts affecting the same as the Com¬ 
mission may require; and the Commission may, in its discretion, for the 
purpose of enabling it the better to carry out the purposes of this Act, 
prescribe a period of time within which all common carriers subject to the 
provisions of this Act shall have, as near as may be, a uniform system 
of accounts, and the manner in which such accounts shall be kept. 

Said detailed reports shall contain all the required statistics for the 
period of twelve months ending on the thirtieth day of June in each year, 
or on the thirty-first day of December in each year if the Commission by 
order substitute that period for the year ending June thirtieth, and shall 
be made out under oath and filed with the Commission at its office in 
Washington within three months after the close of the year for which the 
report is made, unless additional time be granted in any case by the Com¬ 
mission; and if any carrier, person, or corporation subject tc the provisions 
of this Act shall fail to make and file said annual reports within the time 
above specified, or within the time extended by the Commission, for mak¬ 
ing and filing the same, or shall fail to make specific answer to any ques¬ 
tion authorized by the provisions of this section within thirty days from 
the time it is lawfully required so to do, such party shall forfeit to the United 
States the sum of one hundred dollars for each and every day it shall con¬ 
tinue to be in default with respect thereto. The Commission shall also 
have authority by general or special orders to require said carriers, or any 
of them, to file monthly reports of earnings and expenses, and to file period¬ 
ical or special, or both periodical and special, reports concerning any mat¬ 
ters about which the Commission is authorized or required by this or any 
other law to inquire or to keep itself informed or which it is required to 
enforce; and such periodical or special reports shall be under oath when¬ 
ever the Commission so requires; and if any such carrier shall fail to make 
and file any such periodical or special report within the time fixed by the 
Commission, it shall be subject to the forfeitures last above provided. 

Said forfeitures shall be recovered in the manner provided for the recov¬ 
ery of forfeitures under the provisions of this Act. 

The oath required by this section may be taken before any person author¬ 
ized to administer an oath by the laws of the State in which the same is 
taken. 

The Commission may, in its discretion, prescribe the forms of any and all 
accounts, records, and memoranda to be kept by carriers subject to the 
provisions of this Act, including the accounts, records, and memoranda of 
the movement of traffic, as well as the receipts and expenditures of moneys. 
The Commission shall at all times have access to all accounts, records, and 
memoranda kept by carriers subject to this Act, and it shall be unlawful 
for such carriers to keep any other accounts, records, or memoranda than 
those prescribed or approved by the Commission, and it may employ special 
agents or examiners, who shall have authority under the order of the Com¬ 
mission to inspect and examine any and all accounts, records, and memo¬ 
randa kept by such carriers. This provision shall apply to receivers or 
carriers and operating trustees. 

In case of failure or refusal on the part of any such carrier, receiver, or 
trustee to keep such accounts, records, and memoranda on the books and 
in the manner prescribed by the Commission, or to submit such accounts, 
records, and memoranda as are ke t, to the ins ection of the Commission 




CASES BROUGHT IN THE COMMERCE COURT. 309 


nue accounts for the use of carriers by water and has 
prescribed that the accounts for the entire operations 


or any of its authorized agents or examiners, such carrier, receiver, or 
trustee shall forfeit to the United States the sum of five hundred dollars for 
each such offense and for each and every day of the continuance of such 
offense, such forfeitures to be recoverable in the same manner as other for¬ 
feitures provided for in this Act. 

Any person who shall willfully make any false entry in the accounts of 
any book of accounts or in any record or memoranda kept by a carrier, or 
who shall willfully destroy, mutilate, alter, or by any other means or device 
falsify the record of any such account, record, or memoranda, or who shall 
willfully neglect or fail to make full, true, and correct entries in such 
accounts, records, or memoranda of all facts and transactions appertaining 
to the carrier’s business, or shall keep any other accounts, records, or memo¬ 
randa than those prescribed or approved by the Commission, shall be 
deemed guilty of a misdemeanor, and shall be subject, upon conviction in 
any court of the United States of competent jurisdiction, to a fine of not less 
than one thousand dollars nor more than five thousand dollars, or imprison¬ 
ment for a term not less than one year nor more than three years, or both 
such fine and imprisonment: Provided , That the Commission may, in its 
discretion, issue orders specifying such operating, accounting, or financial 
papers, records, books, blanks, tickets, stubs, or documents of carriers 
which may, after a reasonable time, be destroyed, and prescribing the 
length of time such books, papers, or documents shall be preserved. 

Any examiner who divulges any fact or information which may come 
to his knowledge during the course of such examination, except in so far 
as he may be directed by the Commission, or by a court or judge thereof, 
shall be subject, upon conviction in any court of the United States of com¬ 
petent jurisdiction, to a fine of not more than five thousand dollars or 
imprisonment for a term not exceeding two years, or both. 

That the circuit and district courts of the United States shall have juris¬ 
diction, upon the application of the Attorney General of the United States, 
at the request of the Commission, alleging a failure to comply with or a 
violation of any of the provisions of said Act to regulate commerce or of any 
Act supplementary thereto or amendatory thereof by any common carrier, 
to issue a writ or writs of mandamus commanding such common carrier to 
comply with the provisions of said Acts, or any of them. 

And to carry out and give effect .to the. provisions of said Acts, or any of 
them, the Commission is hereby authorized to employ special agents or 
examiners, who shall have power to administer oaths, examine witnesses, 
and receive evidence. 

That any common carrier, railroad, or transportation company receiving 
property for transportation from a point in one State to a point in another 
State shall issue a receipt or bill of lading therefor, and shall be liable to 
the lawful holder thereof for any loss, damage, or injury to such property 
caused by it or by any common carrier, railroad, or transportation company 
to which such property may be delivered or over whose line or lines such 
property may pass, and no contract, receipt, rule or regulation shall exempt 
such common carrier, railroad, or transportation company from the liability 
hereby imposed: Provided , That nothing in this section shall deprive any 
holder of such receipt or bill of lading of any remedy or right of action 
which he has under existing law. 

That the common carrier, railroad, or transportation company issuing 
such receipt or bill of lading shall be entitled to recover from the common 
carrier, railroad, or transportation company on whose line the loss, damage, 
or injury shall have been sustained the amount of such loss, damage, or 
injury as it may be required to pay to the owners of such property, as may 
be evidenced by any receipt, judgment, or transcript thereof. 



310 CASES BROUGHT IN THE COMMERCE COURT. 

of such carriers shall be kept according to a uniform 
system laid out by definite rules of the commission. 

In the classification as prescribed for the report, 
operating expenses are divided into certain general 
accounts, such as maintenance, traffic expenses, 
operation of vessels and terminals, incidental trans¬ 
portation expenses, general expenses, and charter 
expenses. Under these several heads accounts of 
expenditures are required to be divided into groups 
and the groups in turn are divided into primary 
detailed accounts. For example, the report of traf¬ 
fic expenses calls for accounts of superintendence, 
advertising, fast freight lines, outside agencies, 
traffic associations, and other traffic expenses. Ex¬ 
penditures chargeable to transportation expenses 
are required to be divided into general groups under 
the headings: “Operation of vessels,” “Operation 
of terminals,” and “Incidental transportation ex¬ 
penses.” Primary accounts which go to make up 
the items under the general heading are called for 
with specific detail, to the end that classifications of 
operating expenses for carriers by water may be 
presented by an account of the entire transactions 
of the carrier whose business is being inquired into. 
The classification of operating revenues is equally 
specific, requiring accounts of revenue from trans¬ 
portation, revenue from operations other than 
transportation, and charter revenue. Primary 
accounts must be kept and made of passenger, bag¬ 
gage, mail, express revenue, and miscellaneous re- 


CASES BROUGHT IN THE COMMERCE COURT. 311 

ceipts, including, among many other things, wharf, 
demurrage, storage, and other receipts. 

Interrogatories also call for exact information 
as to the amount of capital stock issued, divi¬ 
dends paid, surplus funds, if any, funded and 
floating debt and interest thereon; cost and value 
of the carriers’ property, franchises and equip¬ 
ments, earnings and receipts from each branch of 
business, and from all sources; operating and other 
expenses; complete exhibits of financial operations, 
as well as other complete statements necessary to 
exhibit the carriers’ financial condition and results 
from operation of their entire business. 

In the text of classification of operating revenues 
in the “first issue” pamphlet, particularly re¬ 
ferred to in the petition filed in case No. 22, the car¬ 
rier is called upon to keep an account of its freight 
revenue, passenger revenue, excess baggage, and 
other passenger revenues, together with mail, ex¬ 
press, special service, miscellaneous transportation 
revenues, freight operations other than transporta¬ 
tion, rentals of buildings, and miscellaneous re¬ 
ceipts. In the classification of operating expenses, 
the orders require accounts of superintendence, re¬ 
pairs of vessels, renewals, repairs of tugs and 
lighters, accounts of shop machinery and tools, 
maintenance of equipment, maintenance of termi¬ 
nals, expenses of docks, wharves, buildings, and 
fixtures; traffic expenses, transportation expenses, 
wages of crews, fuel, food supplies, operation of 
terminals, salaries of agents, clerks, and attend- 


312 CASES BROUGHT IN THE COMMERCE COURT. 

ants, stevedore and wharf-laborer accounts, freight 
losses and damages, accounts of damage to prop¬ 
erty, salaries and expenses of general officers, law 
expenses, insurance, charter expenses, including 
rent, maintenance, and operation accounts for hire 
or rent of vessels, and other matters. 

No attempt is made in the orders making classifi¬ 
cations of accounts, and laying down forms, to 
separate revenues or expenses of operations on 
traffic which is interstate from that which is intra¬ 
state, the object being to require a report of and to 
prescribe accounting rules for the entire business of 
any carrier that is subject with respect to any of its 
traffic to the provisions of the act. 

So, without further particularization of the many 
items of information called for by the questions 
which are submitted to the carrier in the report, and 
without examining more closely into the precise 
methods of the system adopted to secure uniformity 
of accounts therein, we may put the fundamental 
question of law presented in this way: What au¬ 
thority, if any, has the commission over water car¬ 
riers situated as are these now before the court? 

At the outset we recognize the force of the sug¬ 
gestion made by petitioners that for a great many 
years the regulation of commerce on the ocean and 
other navigable waters, including the regulation of 
water carriers, has been provided for by laws espe¬ 
cially adapted to that particular subject. Thus it 
was enacted that the liability of owners of vessels 
for the loss or destruction of property, goods or 


CASES BROUGHT IN THE COMMERCE COURT. 313 

merchandise, done, occasioned, or incurred without 
the privity or knowledge of the owner, shall in no 
case exceed the amount or value of the interest of 
such owner in such vessel and her freight then 
pending (Rev. Stat., sec. 4283); and by act of June 
26, 1884, amending section 4283, the individual 
liability of a shipowner is limited to the proportion 
of any or all debts and liabilities that his individual 
share of the vessel bears to the whole; and the 
aggregate liabilities of all the owners of a vessel on 
account of the same shall not exceed the value of 
such vessel and freight pending. Again, by section 
3 of the act of Congress approved February 13, 1893 
(27 Stat. L., 446), it is provided that: 

* * * if the owner of any vessel transporting 

merchandise or property to or from any port in the 
United States of America shall exercise due dili¬ 
gence to make the said vessel in all respects sea¬ 
worthy and properly manned, equipped, and sup¬ 
plied, neither the vessel, her owner or owners, agent 
or charterers, shall become or be held responsible 
for damage or loss resulting from faults or errors 
in navigation or in the management of said vessel 
* * * >> 

And in 1873 Congress passed an act which pro¬ 
hibited railways forming part of an interstate line 
and vessels transporting cattle and other animals 
from State to State from confining the same in cars, 
boats, or vessels for more than twenty-eight hours 
consecutively without releasing the same for water, 
rest, and feeding for at least five consecutive hours 
(Rev. Stat., sec. 4386.) 


314 CASES BROUGHT IN THE COMMERCE COURT. 

But while these statutory provisions, in so far as 
they go, are a regulation of commerce and carriage 
by water and of the limitations upon vessel owners' 
liabilities passed by Congress under its general 
power to regulate commerce ( Providence & New 
York Steamship Co. v. Hill Manufacturing Co. } 
109 U. S., 578; Lord v. Steamship Company, 102 
U. S., 541), still they do not attempt to control 
rates, fares, or charges relating to such transporta¬ 
tion. And, so far as we are advised, not until 
April, 1887, the time when the act to regulate com¬ 
merce became effective, did Congress make refer¬ 
ence to the regulation of rates. Upon this assump¬ 
tion we may refer briefly to the history and scope 
of the act to regulate commerce to see whether Con¬ 
gress, in establishing a system by which interstate 
transportation should be regulated, included water 
carriers and charges for service and accounting by 
water carriers. It is well here to note that by the 
amendments of the act to regulate commerce passed 
June 18, 1910, the Interstate Commerce Commis¬ 
sion was expressly denied the right to establish any 
route classification, rate, fare, or charge when the 
transportation is wholly by water, and that any 
transportation by water affected by the act to regu¬ 
late commerce should be subject to the laws and 
regulations applicable to transportation by water. 

Although courts may not refer to the debates in 
Congress to enable them to discover the meaning 
of the language of an act of Congress, nevertheless 
it is proper for them to review the proceedings con- 


CASES BROUGHT IN THE COMMERCE COURT. 315 

nected with the passage of a law through the legis¬ 
lative houses, in order to get at the correct interpre¬ 
tation of the text used. (United States v. Trans- 
Missouri Freight Association , 166 U. S., 290.) 

The initial legislative step taken to secure a law 
regulating carriers was the adoption of a resolution 
on March 17, 1885, authorizing the President of the 
Senate to appoint a committee to investigate into 
and report upon the subject of “ the regulation of 
transportation by railroad, and water routes in 
connection or competition with said railroads, of 
freight and passengers between the several States, 
etc.” On January 18, 1886, the committee made an 
exhaustive report wherein were pointed out the 
then existing evils in railroad operation, together 
with possible remedies therefor, and a bill was rec¬ 
ommended for passage. In the report special em¬ 
phasis was laid upon the influence of water routes 
as beneficially regulating charges made upon all 
other means of transit, the conclusion of the com¬ 
mittee being that in order “to secure the blessings 
of cheap transportation and to hold our place 
among the nations of the earth, we must develop 
our natural waterways to their fullest capacity and 
give the benefits of lake, river, and canal communi¬ 
cation to the people of all the States as far as prac¬ 
ticable.” The law as approved February 4, 1887, 
to be effective April 5, 1887, contained the following 
paragraph, numbered 1: 

“ * * * That the provisions of this act shall 
apply to any common carrier or carriers engaged 


316 CASES BROUGHT IN THE COMMERCE COURT. 

in the transportation of passengers or property 
wholly by railroad, or partly by railroad and partly 
by water when both are used, under a common con¬ 
trol, management, or arrangement, for a continu¬ 
ous carriage or shipment from one State or Terri¬ 
tory of the United States, or the District of Colum¬ 
bia, to any other State or Territory of the United 
States, or the District of Columbia, or from any 
place in the United States to an adjacent foreign 
country, or from any place in the United States 
through a foreign country to any other place in the 
United States, and also to the transportation in like 
manner of property shipped from any place in the 
United States to a foreign country and carried 
from such place to a port of transshipment, or 
shipped from a foreign country to any place in the 
United States and carried to Such place from a 
port of entry either in the United States or an ad¬ 
jacent foreign country: Provided, however, That 
the provisions of this act shall not apply to the 
transportation of passengers or property, or to the 
receiving, delivering, storage, or handling of prop¬ 
erty, wholly within one State, and not shipped to 
or from a foreign country from or to any State or 
Territory as aforesaid.” 

Amendments to this section made in June, 1906, 
removed doubt as to what constituted the test of 
jurisdiction by changing the punctuation so as to 
make the provisions of the act apply to “any com¬ 
mon carrier or carriers engaged in the transporta¬ 
tion of passengers or property wholly by railroad 
(or partly by railroad and partly by water when 
both are used under a common control, management, 
or arrangement for a continuous carriage or ship- 


CASES BROUGHT IN THE COMMERCE COURT. 317 

ment), from one State or Territory” etc. The effect 
of the parentheses was to make the words “common 
control, management, or arrangement” applicable 
only to transportation which is partly by railroad and 
partly by water. We do not regard the change as 
of special importance to this case further than that 
it shows that Congress consistently meant to keep 
within the transportation over which it would exer¬ 
cise a measure of control, to wit, not alone interstate 
traffic by all-rail route, but interstate traffic in part 
by water when used in connection with rail under a 
common control, management, or arrangement for a 
continuous carriage or shipment. 

It is undoubtedly true that in the exercise of its 
power over interstate commerce the principal mov¬ 
ing thought of Congress was to regulate railroad 
corporations. Commonly known practices of un¬ 
just discrimination in various forms by railroads 
had led to many evils, which owing to the restricted 
powers of the States could only be effectively dealt 
with through general law. The decision of the 
Supreme Court in Wabash, St. Louis and Pacific 
Railway Co. v. Illinois (118 U. S., 557), rendered 
in October, 1886, to the effect that a statute of a 
State attempting to regulate or to impose any re¬ 
striction upon the transmission of persons or prop¬ 
erty from one State to another is not within the 
class of legislation which the States may enact in 
the absence of legislation by Congress, and that 
such a statute is void even as to that part of such 
transmission which may be within the State, revers- 


318 CASES BROUGHT IN THE COMMERCE COURT. 

ing the decision of the Supreme Court of Illinois, 
helped to draw public attention to the situation and 
quickened the demand for congressional action. 

Mentioning the causes which led to action by Con¬ 
gress, the Supreme Court, in Texas and Pacific 
Railway Co. v. Interstate Commerce Commission 
(162 U. S., 197, 210), said: 

“* * * They chiefly grew out of the use of 
railroads as the principal modern instrumentality 
of commerce. While shippers of merchandise are 
under no legal necessity to use railroads, they are so 
practically. The demand for speedy and prompt 
movement virtually forbids the employment of slow 
and old fashioned methods of transportation, at 
least in the case of the more valuable articles of 
traffic. At the same time, the immense outlay of 
money required to build and maintain railroads, 
and the necessity of resorting, in securing the rights 
of way, to the power of eminent domain, in effect 
disable individual merchants and shippers from 
themselves providing such means of carriage. 
From the very nature of the case, therefore, rail¬ 
roads are monopolies, and the evils that usually 
accompany monopolies soon began to show them¬ 
selves, and were the cause of loud complaints. The 
companies owning the railroads were charged, and 
sometimes truthfully, with making unjust discrimi¬ 
nations between shippers and localities, with mak¬ 
ing secret agreements with some to the detriment 
of other patrons, and with making pools or combi¬ 
nations with each other, leading to oppression of 
entire communities. 

Some of these mischiefs were partially remedied 
by special provisions inserted in the charters of the 


CASES BROUGHT IN THE COMMERCE COURT. 319 

companies and by general enactments by the sev¬ 
eral States, such as clauses restricting the rates of 
toll, and forbidding railroad companies from be¬ 
coming concerned in the sale or production of arti¬ 
cles carried, and from making unjust preferences. 
Relief, to some extent, was likewise found in the 
action of the courts in enforcing the principles of 
the common law applicable to common carriers— 
particularly that one which requires uniformity of 
treatment in like conditions of service. 

As, however, the powers of the States were re¬ 
stricted to their own territories, and did not enable 
them to efficiently control the management of great 
corporations whose roads extend through the entire 
country, there was a general demand that Con¬ 
gress, in the exercise of its plenary power over the 
subject of foreign and interstate commerce, should 
deal with the evils complained of by a general enact¬ 
ment, and the statute in question was the result.” 

On the other hand, as has been pointed out by the 
Supreme Court, in referring to the act to regulate 
commerce, the purpose of Congress was to embrace 
the whole range of interstate commerce, and this is 
made apparent by the exclusion only of domestic 
commerce in the last clause of the first paragraph 
of section 1, and in the declaration of the scope and 
purpose of the act announced in the title. {Armour 
Packing Co. v. United States, and other cases, 209 
U. S., 56.) Now, of course, steamers which under¬ 
take for hire to transport the goods of those who 
may choose to emplo}^ them from place to place are 
carriers {Niagara et als. v. Cordes, 21 How., 7); 
and undoubtedly whenever as carriers they enter 


320 CASES BROUGHT IN THE COMMERCE COURT. 

upon the transportation of freight or passengers 
and are used under a common arrangement with a 
railroad for a continuous carriage of passengers or 
property from one State to another State they are 
brought within the purview of the first section of 
the act. 

As there is involved in the opinion just expressed 
construction of the words “when both are used 
under a common control, management, or arrange¬ 
ment for a continuous carriage,” etc., it is appro¬ 
priate to consider them for a moment. It is ap¬ 
parent that by failure in terms to include them, 
water carriers doing business as are the steamers 
belonging to petitioners herein, are not directly in 
any way subject to the act unless their connection 
with railroads and their uses under certain arrange¬ 
ment with railroads make them so; that is to say, 
water carriers situated as are these petitioners are 
exempt from the provisions of the act in respect to 
their intrastate port-to-port business and their 
interstate port-to-port business. Indeed, there is 
no real contention otherwise, and it would therefore 
follow that the commission has no control over any 
business done by these petitioners except such inter¬ 
state traffic as is carried on under a joint arrange¬ 
ment between them and rail carriers. 

But we were told upon the argument that through 
bills of lading covering part railroad and part 
water transportation under joint tariffs are issued 
by the petitioners. Moreover, under the pleadings 
we must take it as a fact that for the purpose of 


CASES BROUGHT IN THE COMMERCE COURT. 321 

establishing certain through routes petitioners have 
filed with the Interstate Commerce Commission 
their joint tariffs, or their concurrence in tariffs 
filed by the railroad companies, and that the peti¬ 
tioners’ steamers carry for hire passengers and 
freight under said joint tariffs over the water por¬ 
tion of the through routes. These things being true, 
we find it impossible to escape from the conclusion 
that there is engagement in transportation in so far 
as both water and rail are used to carry from one 
State to another, and there is a common arrange¬ 
ment made as describee! for a continuous shipment 
of passengers and freight whereby petitioners have 
brought themselves within the terms of the act and 
are subject to such of its provisions as are applicable 
to carriers under such arrangement. 

Let us see what the practical view of the commis¬ 
sion has been where the subject of use and arrange¬ 
ment has been adverted to. 

In the matter of Joint water and rail lines (2 
I. C. C. R., 645, 646-647) the commission observed: 

“* * * that carriers by water are not in terms 
brought under the regulation of the act to which 
carriers by rail are subject except ‘when both are 
used under a common control, management, or ar¬ 
rangement for a continuous carriage or shipment/ 
etc. If the carriers by water see fit to operate 
independently, no authority is conferred upon the 
Commission to compel them to do otherwise, and 
the understanding of the Commission is that by the 
Act to regulate commerce the carriers by rail are 
also left at liberty to act independently. They can- 

48250—S. Doc. 789, 62-2-21 


322 CASES BROUGHT IN THE COMMERCE COURT. 

not decline to receive from or deliver freight to 
connecting water lines; but at the same time they 
are not required by law to make with the water 
lines joint rates, though they should be expected to 
do so when they can thereby subserve the inter¬ 
est of the public without detriment to their own 
interests. * * *” 

In the third annual report of the commission the 
relation of lake and rail transportation received 
careful consideration (3 I. C. C. R., 289-381). It 
was commented upon that the act was only appli¬ 
cable to water transportation when used under a 
common control, management, or arrangement for 
a continuous carriage or shipment in connection 
with a railroad and as part of a line or route of which 
another part is a railroad; and that carriers engaged 
in transportation wholly by water were independent 
of regulation. The commission deplored such a 
condition. Special reference was made to traffic 
upon railroads from the Lakes to the Atlantic coast 
where the boats were used in connection with a rate 
under a common control or management, for con¬ 
tinuous carriage from Chicago, Duluth, and other 
western lake ports to tidewater at New York, Phila¬ 
delphia, and other eastern cities. It was stated by 
the commission that such carriers on lake and rail 
were made subject to the act and were required to 
publish their rates and charges together with pro¬ 
posed increases or reductions. 

In the case of The Railroad Commission of Florida 
v. The Savannah, Florida A* Western Railway Co. 
et als. (5 I. C. C. R. 13), a question involved was 


CASES BROUGHT IN THE COMMERCE COURT. 323 


whether some of the defendant steamship companies 
and a certain railroad company were common car¬ 
riers engaged in interstate commerce and subject 
to the jurisdiction of the commission. It was held 
that while the steamship companies constituted all¬ 
water lines, inasmuch as they were each engaged in 
connection with the railroads in the transportation of 
oranges from points in Florida to northeastern cities 
under through bills of lading, and inasmuch as they 
joined in the action of the various railroads and 
steamship lines in advancing certain rates under in¬ 
vestigation, under the act and the former decisions 
of the commission the companies were carriers of 
interstate commerce and subject to the jurisdiction 
of the commission in respect thereto. 

In the matter of Jurisdiction over water carriers 
(15 I. C. C. R. 205), the commission again had 
occasion to give consideration to the question, which 
was stated in this way: 

“* * * Does the fact that a water carrier 

joins with a rail carrier in forming a through route 
or establishing a joint rate for the transportation of 
certain traffic subject all the interstate traffic of 
such water carrier to the requirements of the act 
and the jurisdiction of the Commission; or, stated 
in a narrower form, does such action on the part 
of a water carrier subject its port-to-port traffic to 
all the provisions of the act, including the posting 
and observing of tariffs and similar requirements V J 

The language of section 1 of the act, as we have 
heretofore quoted it, was carefully examined, and 
it was held that while interstate commerce wholly 


324 CASES BROUGHT IN THE COMMERCE COURT. 

by railroad was subject to the act, interstate com¬ 
merce wholly by water was not; yet it was said, 
“ It is equally obvious that interstate commerce 
partly by railroad and partly by water, under a 
common control, management, or arrangement for 
a continuous carriage or shipment, is subject to the 
act.” The commission then proceeded to deter¬ 
mine whether under conditions where some of the 
commerce transported by a carrier is subject to the 
act all the commerce transported by such carrier 
was also within the act; and the view taken was 
that the statute was only applicable to a common 
carrier or carriers engaged in transportation 
partly by rail and partly by water when both are 
used under a common control, management, or 
arrangement for a continuous carriage or shipment. 
Judge Knapp, then chairman of the Interstate Com¬ 
merce Commission, said: 

“The use of the word 'when’ is significant, and 
its natural meaning seems to be that a water car¬ 
rier is subject to the act 'in so far as’ or 'to such 
extent as’ it carries traffic under a common control, 
management, or arrangement with a railroad.” 
Regulation of charges exacted upon the port to 
port business of water carriers was held not to be 
authorized, and reasons were pointed out why any 
other construction was unreasonable. For example, 
it was observed that if one water carrier, by be¬ 
coming a party to a joint rate with a railroad, was 
thereby required to publish and adhere to its rates 
between ports it could not hope to compete with a 


CASES BROUGHT IN THE COMMERCE COURT. 325 

carrier not required to publish and maintain its 
rates, which would bring about a result whereby 
the law, instead of promoting and facilitating com¬ 
merce, would tend rather to its injury by making 
unprofitable the instrumentalities provided for the 
carriage of that commerce. It was shown that 
under such a construction of the law there might 
be two water carriers between the same ports at¬ 
tempting to secure the transportation of competi¬ 
tive traffic, one of which would be bound to observe 
and collect rates which it had published thirty 
days in advance, while the other could make any 
rate which would secure the traffic. Nevertheless 
water carriers were held to be subject to the law 
as to such interstate traffic as is transported under 
a common control, management, or arrangement 
with a rail carrier. 

Judicial construction accords with these views. 
In Ex parte Koehler , Receiver , etc. (30 Fed., 867), 
decided in April, 1887, though the facts were unlike 
those before us, the court in its discussion of the 
interstate commerce act thought that it did not apply 
to all of the agencies or instrumentalities used or 
engaged in interstate commerce; that it did not 
include any water craft unless used in connection 
with the railways under a common control, manage¬ 
ment, or arrangement for a continuous carriage or 
shipment, etc., and said: 

“The mere fact that a railway wholly within a 
State and a vessel running between said State and 
another meet at a point within the railway State 


326 CASES BROUGHT IN THE COMMERCE COURT. 

and thus form a continuous line of transportation 
between the two States by the one taking up the 
goods delivered by the other at its terminus and 
carrying them thence to their destination, does not 
bring the carriers who so use the railway and steamer 
within the act. So long as the railway and steamer 
are each operated under a separate and distinct con¬ 
trol, making its own rates and only liable for the 
carriage and safe delivery of the goods at the end of 
its.own route, the act does not apply to the trans¬ 
action. To make these carriers subject to the act 
the railway and vessel must, as therein provided, be 
operated or used under a “common control”—a con¬ 
trol to which each is alike subject, and by which rates 
are prescribed and bills of lading given for the carriage 
of goods over both routes as one. 

A fair implication from this language is that 
where there is an arrangement and a use by both 
water and rail carrier under an arrangement by bill 
of lading given for carriage over both routes the 
carriers are within the act. 

In United States v. Wood et at. (145|Fed., 405) the 
court held that the test of subjection to the act was 
through routing in interstate commerce, and that 
when one carrier united with one or more in making 
a rate for interstate traffic and issued a through bill 
therefor it became subject to the act, and that the 
successive receipt and forwarding in the ordinary 
course of business by two or more carriers in inter¬ 
state traffic under through bills, or under any ar¬ 
rangement for continuous carriage over their lines, 
constituted assent to such common arrangement for 
the carriage within the meaning of the act. (See 


CASES BROUGHT IN THE COMMERCE COURT. 327 

also United States v. Camden Iron Works, 150 Fed., 
214.) 

In United States v. Colorado & N. W. R. Co. (157 
Fed., 321) the Court of Appeals of the Eighth Circuit 
adverted to the applicability of the act to carriers 
partly by water and partly by railroad operating 
under a common control, management, or arrange¬ 
ment, and referred to the amendatory act of June 
29, 1906, as governing common carriers engaged in 
interstate commerce wholly by railroad, even though 
they are exempt from any common control, manage¬ 
ment, or arrangement with other carriers. 

Going to the highest authority we find like gen¬ 
eral construction and definition of what will be 
looked upon as a common arrangement. 

In Cincinnati, New Orleans and Texas Pacific 
Railway Co. v. Interstate Commerce Commission, 
and Interstate Commerce Commission v. Cincin¬ 
nati, New Orleans and Texas Pacific Railway Co. 
(162 U. S., 184), it was said: 

“ * * * But when the Georgia Railroad Com¬ 
pany enters into the carriage of foreign freight, by 
agreeing to receive the goods by virtue of foreign 
through bills of lading, and to participate in through 
rates and charges, it thereby becomes part of a 
continuous line, not made by a consolidation with 
the foreign companies, but made by an arrangement 
for the continuous carriage or shipment from one State 
to another, and thus becomes amenable to the Federal 
act, in respect to such interstate commerce. We do 
not perceive that the Georgia Railroad Company 
escaped from the supervision of the Commission by 


328 CASES BROUGHT IN THE COMMERCE COURT. 

requesting the foreign companies not to name or fix 
any rates for that part of the transportation which 
took place in the State of Georgia when the goods were 
shipped to local points on its road. It still left its 
arrangement to stand with respect to its terminus at 
Augusta and to other designated points. Having 
elected to enter into the carriage of interstate freights 
and thus subjected itself to the control of the Com¬ 
mission, it would not be competent for the company 
to limit that control, in respect to foreign traffic, to 
certain points on its road and exclude other points. 

* * * All we wish to be understood to hold 

is, that when goods shipped under a through bill of 
lading, from a point in one State to a point in an¬ 
other, are received in transit by a State common 
carrier, under a conventional division of the charges, 
such carrier must be deemed to have subjected its 
road to an arrangement for a continuous carriage or 
shipment within the meaning of the act to regulate 
commerce. When we speak of a through bill of 
lading we are referring to the usual method in use 
by connecting companies, and must not be understood 
to imply that a common control, management, or 
arrangement might not be otherwise manifested. 

The principle of this last case is to be invoked 
because the petitioning water carriers before us ship 
goods under through bills of lading from points in 
one State to points in another under traffic arrange¬ 
ments with railroads for continuous carriage or ship¬ 
ment. They have thus chosen to make an arrange¬ 
ment, presumably according to the usual method in 
use by connecting carrying companies, and so have 
subjected their boats in respect to such interstate 


CASES BROUGHT IX THE COMMERCE COURT, 329 

carriage to the control vested in the commission, and 
are carriers subject to the act. 

The learned counsel for the petitioners admitted 
upon the argument that the two carriers, rail and 
water, could not disregard the long and short haul 
provision of section 4 of the act under circumstances 
where an all-rail carrier could not; but his suggestion 
was that a reasonable interpretation of the law might 
be that inasmuch as railroads are subject to the act, 
and inasmuch as a rail carrier can do nothing by 
itself or with another railroad or with a water car¬ 
rier which can not be reached by act of Congress, 
the remedy for a violation of the law in respect to 
traffic carried by water carrier under common ar¬ 
rangement, except as to rebates, may be found by 
dealing with the rail carrier only, and which alone 
may be liable. This argument must needs find sup¬ 
port in some construction of the text whereby water 
carriers are exempted, even though operating in 
interstate traffic under an arrangement with a rail¬ 
road for a continuous shipment . It therefore involves 
limiting the term “common carrier” embraced in 
section 1 to railroads entering into arrangements 
with water carriers, and so confines authority con¬ 
ferred by section 20 to inquiry into the carriage con¬ 
cerns of the railroad only. The words of the statute, 
however, do not so restrict the common arrange¬ 
ments for use. They include any common carrier 
or carriers engaged in transportation of passengers 
or property partly by railroad and partly by water, 
and thus have that broader scope which the com¬ 
mission has time and again regarded them as having; 


330 CASES BROUGHT IN THE COMMERCE COURT. 

and which upon careful examination we believe to 
be in accord with the spirit as well as the letter of 
the law. 

Regarding the petitioners, therefore, as subject 
to control, we nevertheless must not overlook limi¬ 
tations which are incidental to the subjection as 
well as to the regulating power. 

As we have already seen, the subjection is at once 
restricted for the reason that the intrastate port to 
port business and the interstate port to port busi¬ 
ness of the petitioners are outside the purview of 
the act of Congress; so we can advance to a consid¬ 
eration of whether or not the regulating power is 
limited by section 20. 

The contention of the Government here is that 
the commission is authorized to call for full reports 
of the entire business of these petitioners, intra¬ 
state as well as interstate, while petitioners say that 
no such authority is given or could be given. 

The broad object of section 20 evidently was to 
clothe the commission with authority to call for any 
and all information which would enable the com¬ 
mission to act intelligently in the lawful exercise of 
its delegated power of rate regulation. Of course, 
without some precise knowledge of traffic conditions 
and of interstate business, the reasonableness of 
rates and fares relating to such business would be 
impossible of determination. But Congress has ex¬ 
pressly restricted the authority to call for reports 
and to prescribe the form of such reports to common 
carriers subject to the provisions of the act. It is 


CASES BROUGHT IN THE COMMERCE COURT. 331 

impossible to read section 20 as independent of sec¬ 
tion 1 imposing this limitation. And inasmuch as 
the act has only to do with interstate commerce and 
carriers engaged in interstate commerce, only such 
carriers can be included within those which must 
respond to the calls for information and comply with 
the requirements of the commission in matters of 
accounting. This being true, inasmuch as the re¬ 
ports of affairs, accounts, finances, and like things of 
the carriers are evidence for the ascertainment of 
facts relating to the interstate business, which alone 
is the proper subject of regulation, the scope of the 
right to call for the report is confined by the nature of 
the business to be set forth within the report when 
made. As a correlative proposition, the obligation 
upon the carrier, subject to the provisions of the act, 
is to report such business as is interstate and not 
exempt, and under section 20 there is no obligation 
upon it to report other business. 

Furthermore, the act only confers the right to 
prescribe how accounts of business properly the 
subject of regulation shall be kept, and no duty 
rests upon the carrier to obey orders prescribing 
methods or forms of accounting except for such 
business. It is said by the Government, however, 
that conceding lack of power to regulate any com¬ 
merce except that which is carried on under com¬ 
mon arrangement, nevertheless the interstate and 
intrastate operations of these water carriers, peti¬ 
tioners, are so commingled that it is impractical to 
obtain information of the interstate traffic with- 


332 CASES BROUGHT IN THE COMMERCE COURT. 

out full knowledge of the intrastate concerns. The 
answer to these suggestions is in the text of the law, 
which expresses the mind of Congress and limits 
all authority to the regulation of carriers subject 
to the provisions of the act, and which in this case 
are those engaged in transportation of a particular 
nature; that is to say, interstate, partly by rail and 
partly by water, used under a common arrange¬ 
ment as already defined. 

We recognize that section 20 relates to reports 
by carriers rather than to the carriage itself, but 
the power to call for the information in the re¬ 
port is circumscribed by the relation of the report 
to the thing itself, interstate traffic. A like rule 
must govern with respect to bookkeeping and ac¬ 
counting methods. The commission, in the exer¬ 
cise of the power to establish a uniform system of 
accounting, can only lay down forms and rules 
which relate to the subject itself, interstate traffic 
not exempt. 

It may be that difficulties will arise which will 
make it hard for the commission to confine its in¬ 
quiries into interstate business done under ar¬ 
rangement with the rail carrier and to prescribe 
systems of keeping books and accounts without im¬ 
pinging upon matters which are intrastate exclu¬ 
sively, and it may be a somewhat tedious work for 
the carrier to furnish this information and to fol¬ 
low the system of accounting; but as Congress has 
seen fit to exercise its authority with respect to 
that which is interstate, mere perplexities of fram- 


CASES BROUGHT IN THE COMMERCE COURT. 333 

ing the interrogatories or of accounting, or record¬ 
ing the evidences of such transactions can not be 
urged as a reason for refusing to sustain the power 
conferred. Nor does it seem logical to say that if 
the business is so far separable as to furnish a basis 
for a common arrangement as to part of it that 
report and systematic account of such part can not 
be had without report of the whole. 

It is fitting at this point to repeat that the reports 
and the methods and forms contemplated under 
section 20 are for the information of the commission 
and for the simplification of furnishing such infor¬ 
mation. But we must not confuse such reports 
with information sought under an investigation 
undertaken by the commission upon complaint or 
of its own motion. In the one instance the com¬ 
mission calls for facts necessary to the general 
performance of a duty imposed upon it; in the 
other it exerts its power to obtain evidence neces¬ 
sary to enable it to decide a question involving 
something like an issue. The information by re¬ 
port being directly pertinent to the substantive 
subject of what is interstate commerce, and this be¬ 
ing the proper subject of regulation, presumably 
will be furnished by the carrier in truthful and 
honest statement. 

If, however, the report of the carrier is not ac¬ 
curate or truthful, or the information furnished is 
not sufficiently complete to enable the commission 
to perform its duty, there are ways by which in¬ 
vestigation can be had and which, if pursued, 


334 CASES BROUGHT IN THE COMMERCE COURT. 

clearly may render it proper for the commission, 
in its effort to get at the truth of the interstate busi¬ 
ness of the carrier, to inquire fully into its intra¬ 
state business—not with a view of exerting power 
over such intrastate business, but because inquiry 
into such business is essential in order to know the 
true condition of the interstate business. Such a 
contingency, however, is not presented upon first 
motion under section 20, nor does the right to obtain 
such necessary information carry with it the right 
of investigation into business not interstate and not 
directly connected therewith. For instance, it 
would seem to be relevant in the Goodrich cases to 
inquire into the amount of capital stock, debts, 
value of franchises, improvements, receipts, divi¬ 
dends, and such other matters pertinent to the 
business of the corporation as Congress evidently re¬ 
garded to be foundation knowledge for the commis¬ 
sion to have; but, as far as appears in the record in 
cases 23 and 24, there is no necessity for going into 
the details of the amusement-park business carried 
on by the White Star Lines, for it has no relation to 
interstate traffic. 

It is a circumstance of slight force, but deserving 
of mention as in line with these observations, that 
nowhere in section 20 is there reference to “investi¬ 
gation” by the commission. “Reports” contain¬ 
ing “information” may be required and forms of 
accounts, records, and memoranda may be pre¬ 
scribed—even inspection and examination of ac¬ 
counts, records, and memoranda may be had by 


CASES BROUGHT IN THE COMMERCE COURT. 335 

examiners of the commission—but they are always 
for purposes of information. 

Information of interstate traffic business and 
power to make the carrier report it by a uniform 
system of accounting are the keynotes of section 20. 

“ Investigation/’ on the other hand, is the word 
employed in parts of section 12, authorizing deposi¬ 
tions in proceedings before the commission; investi¬ 
gation is authorized where complaint is made or 
where questions arise as provided for by sections 13 
and 15 of the act. Reports of u investigations” are 
to be made (sec. 14), and attorneys may be em¬ 
ployed for proper representation of the public in¬ 
terests in “investigations” made by the commis¬ 
sion, or proceedings pending before it or in court. 

These considerations make it reasonable to con¬ 
strue the power given by section 20 as one pertain¬ 
ing to first information, ample presumably to secure 
necessary facts to enable the commission to go for¬ 
ward, yet not broad enough in initial proceeding to 
warrant inquisitorial investigation into collateral 
affairs, which of themselves do not constitute inter¬ 
state commercial traffic or are not necessarily di¬ 
rectly interwoven therewith. 

Under this view of the power conferred upon 
the commission by section 20, it is very clear that 
the authority to require the reports of interstate 
business where there is the use under a control 
as prescribed is granted. In Baltimore & Ohio 
Railroad Co. v. Interstate Commerce Commission 
(decided May 29, 1911), the railroad company 


336 OASES BROUGHT IN THE COMMERCE COURT. 


brought a bill to annul an order of the com¬ 
mission requiring the railroad company to make 
monthly reports showing the instances where em¬ 
ployees subject to the act of Congress of March 
4, 1907 (Chap. 2939, 34 Stat., 1415), had been on 
duty for a longer period than that allowed. The 
contention of the carrier was that the commission 
had no authority to require the reports called for. 
The Supreme Court examined section 20 of the 
act to regulate commerce and held that a grant of 
power extended to the commission in the execu¬ 
tion of the act whereby they could order carriers 
to file monthly reports of earnings and expenses 
and to file periodical or special, or both periodical 
and special, reports concerning any matter about 
which the commission is authorized or required by 
law to inquire or keep itself informed, or which it 
is required to enforce, etc., clearly embraces the 
power which the commission had there asserted, 
and authorized it “to promulgate an order re¬ 
quiring reports to be made.” But it appears that 
the court limited its observations to interstate 
business and was careful not to construe the law 
as extending the power beyond the right to make 
the order requiring reports of such business. 

From these expressions it follows that the theory 
of the commission in the present cases was errone¬ 
ous. It acted within its authority when it made 
an order calling for reports of all business done by 
the petitioners under through bills of lading where 
the transportation was partly by railroad from one 


CASES BROUGHT IN THE COMMERCE COURT. 337 

State to another, or from one place in the United 
States to Canada, an adjacent foreign country; and 
it was within its power when it prescribed the sys¬ 
tem of accounts and the uniform method of keep¬ 
ing accounts for such interstate business; and so far 
as the orders call for information confined to such 
traffic, or directly related thereto, and so far as the 
orders prescribe uniform systems of bookkeeping and 
accounting for such traffic and such as is directly 
related thereto, they must be sustained. But, in so 
far as the reports called for and the accounting 
rules prescribed extend beyond such interstate busi¬ 
ness of the carriers, or include matters of intrastate 
traffic accounts and affairs and concerns exclu¬ 
sively, they become invasions of the rights of the 
carriers, and to the extent of such invasions are 
unlawful. 

What we have said makes the conclusion of the 
case comparatively simple. 

Petitioners are amenable to the law with respect 
to all interstate business done by them in connection 
with railroads under arrangements such as have been 
discussed, and the commission acted within its 
authority when it made orders for reports with 
respect to such business and prescribed forms of 
accounting for such business; but it went beyond its 
authority in calling for reports of transactions relating 
exclusively to “port to port” interstate business, or 
to intrastate traffic or affairs, and in propounding 

48250—S. Doc, 789* 02-2-22 


338 CASES BROUGHT IN THE COMMERCE COURT. 

questions and prescribing bookkeeping and account¬ 
ing methods in respect thereto. 

A recast of the forms of reports should be made 
by the commission, acting in conformity with the 
views herein expressed. We think it advisable that 
the commission, rather than the court, should proceed 
to make the recast. 

The demurrers are overruled and the motions to 
dismiss are denied; and the prayers of the petitioners 
for orders of injunction are granted. The orders 
issued by the commission are hereby set aside, and 
the matter is referred to the commission to be pro¬ 
ceeded with as may be proper under the law as herein 
indicated. So ordered. 


United States Commerce Court. 


No. 25.— May Session, 1911. 


Omaha & Council Bluffs Street Railway Com- 
pany and Omaha & Council Bluffs Railway & 
Bridge Company, petitioners, 
v. 

Interstate Commerce Commission, respondent. 
The United States, intervening respondent. 


ON BILL AND DEMURRER. 

For opinion and order of the Interstate Com¬ 
merce Commission, see 17 I. C. C. Rep., 239. 

For opinion of Circuit Court granting prelimi¬ 
nary injunction, see 179 Fed., 243. 

Mr. John Lee Webster , for petitioners. 

Mr . Blackburn Esterline , special assistant to the 
Attorney General, for the United States. 

Dr. Charles W. Needham , for Interstate Com¬ 
merce Commission. 

Before Archbald, Hunt, Carland, and Mack, 
Judges. 

° QQQ 





340 CASES BROUGHT IN THE COMMERCE COURT. 

[October 5, 1911.] 

Mack, Judge: 

The Omaha & Council Bluffs Railway & Bridge 
Co., hereinafter referred to as the bridge company, 
an Iowa corporation constructed, under authority 
of an act of Congress (act Mar. 3, 1887, 24 Stat., 
c. 356, p. 501), and now owns a joint railroad, 
wagon, and foot toll bridge over the Missouri River 
at Omaha, Nebr., and Council Bluffs, Iowa, and 
also owns a railway, which begins at the west end of 
the bridge in Omaha, Nebr., and extends eastward 
across the bridge to Council Bluffs, Iowa. The 
bridge company also owns the stock and bonds of 
the Omaha, Council Bluffs & Suburban Railway 
Co., a street railway line in Council Bluffs. The 
Omaha & Council Bluffs Street Railway Co., here¬ 
inafter referred to as the street railway company, 
owns and operates all of the street railway lines in 
Omaha, Nebr., in addition to which, in January, 
1903, it leased all of the properties of the bridge 
company for a period of years, so that it now oper¬ 
ates all of the lines of both systems. 

Foot passengers paj^ 5 cents bridge toll; local 
street car fare in either city is 5 cents; interstate 
street railway passengers pay no direct bridge toll 
but a single fare of 10 cents, or $1.50 for 30 com¬ 
mutation tickets, for a ride to or from any point 
on the line in Council Bluffs, except Courtland 
Beach, over the bridge from or to any point on the 
line of the street railway company within the so- 
called loop in Omaha. Interstate passengers to or 


CASES BROUGHT IN THE COMMERCE COURT. 341 

from a point in Omaha beyond the loop receive no 
transfers, but according to the practice sought to 
be corrected are required to pay an additional local 
fare of 5 cents. The loop district in Omaha extends 
westward on Douglas to Fourteenth Street, south 
upon that street to Howard, east to Eleventh, north 
to Douglas, and eastward back to the bridge. 

On complaint the Interstate Commerce Commission 
refused to reduce the 10-cent fare to 5 cents, but 
abolished the loop limitation in Omaha, ordering the 
bridge and street railway companies not to charge 
more than 10 cents to or from any point on the line 
in Omaha from or to Council Bluffs, except Court- 
land Beach. The report of the commission will be 
found in 17 Interstate Commerce Commission Re¬ 
ports, 239. A bill was thereupon filed in the Circuit 
Court of the United States for the District of Ne¬ 
braska, and a preliminary injunction was granted 
against the enforcement of this order. (Omaha & 
C. B. St. Ry. Co. v. 7. C. C., 179 Fed., 243.) The 
case was subsequently transferred to this court and 
is now up for disposition on a demurrer to the bill, 
except as to one paragraph, which is answered by 
adding to the order of the commission its report, 
thus making the latter a part of the record. 

On the oral argument, though not in the briefs, it 
was suggested, in accordance with the charges of the 
bill, that the order of the commission, in practically 
compelling the street railway company to give trans¬ 
fers in Omaha, went both beyond the issues in the 
case before the commission and beyond its constitu- 


342 CASES BROUGHT IN THE COMMERCE COURT. 

tional as well as its statutory powers in that it 
thereby attempted to regulate the strictly intrastate 
affairs of the street railway company by an order 
which had no reference to the transportation over 
the bridge, but to what should happen after it was 
complete, compelling the company in effect to ren¬ 
der an additional service without compensation. 
But the complaint before the commission was that 
the 10-cent fare between Council Bluffs, Iowa, and 
Omaha, Nebr., was unreasonable and unjust, and it 
was prayed that the defendants be required to make 
and fix passenger fares to apply in future to the 
transportation of passengers from Council Bluffs to 
Omaha, and the reverse, which should not exceed 5 
cents per passenger or such charge as the commission 
should find reasonable and just. The report recited 
that the complainant assailed the 10-cent fare be¬ 
tween the two cities over the bridge as unreasonable 
and prayed that “ no extra charge be made when in 
the course of interstate transportation passengers are 
carried over such bridge/’ and the establishment of 
a 5-cent fare. 

While the primary object aimed at was the reduc¬ 
tion of the 10-cent fare to 5 cents, the prayer for 
the abolition of all extra charges and the fixing of 
a reasonable rate for interstate passenger transpor¬ 
tation between the two cities fairly included, in 
our opinion, the elimination of the loop boundary 
for the 10-cent fare. Moreover, the commission 
expressly states in the report that “the reasonable- 


CASES BROUGHT IN THE COMMERCE COURT. 343 

ness of confining it (the 10-cent fare) to points on 
the loop is put in issue in these proceedings/’ 

The lines from the bridge in Omaha to and through 
the loop do not constitute a system separate and 
distinct from those beyond the loop. Both are 
under the common ownership, control, and opera¬ 
tion of the street railway company. Local passen¬ 
gers pay a single fare within the city of Omaha 
between all points, receiving the necessary transfers 
at-junction points to and from the loop. 

The question presented was, therefore, not whether 
an independent company operating solely in Omaha 
beyond loop points and exchanging transfers solely 
for local passengers with an interstate company 
operating the loop lines could be compelled to give 
transfers to interstate passengers as well—as to 
which we intimate no opinion—but whether or not 
the interstate company, operating all the lines as 
one system, the parts of which are independently 
operated only in a physical sense, in that transfers 
are necessary from and to the loop, could be com¬ 
pelled, without additional compensation, to carry 
an interstate passenger to a point on its own lines 
beyond the loop district; in other words, whether 
15 cents is or is not a reasonable fare to be paid for 
the entire interstate journey made on the several 
lines operated by the street railway company. So 
stated, the question is obviously one of the reason¬ 
ableness of interstate passenger rates, and as such 
clearly within the jurisdiction of the commission, if 


344 CASES BROUGHT IN THE COMMERCE COURT. 

it has any jurisdiction over corporations such as the 
street railway company. 

Complainants do, however, allege—and this brings 
us to a consideration of the principal and important 
question in the case—that the Interstate Com¬ 
merce Commission, under the act, has no jurisdiction 
over interstate passenger rates charged by a cor¬ 
poration engaged in the business in which the street 
railway company is engaged here. 

The judges of the Circuit Court before whom the 
case originally came, in granting a preliminary in¬ 
junction, held that the complainants were street 
railway companies engaged in operating street cars 
for passenger transportation, and not commercial 
railroad companies engaged in. the general trans¬ 
portation of freight and passengers, and as such did 
not come within the class of corporations over 
whose rates the Interstate Commerce Commission 
has been granted jurisdiction. The cases cited in 
support of this view involved the interpretation of 
various State acts establishing commissions, regu¬ 
lating taxes, providing for joint rates or connections, 
giving mechanic’s liens, abolishing the fellow-servant 
rule, or in other ways dealing with railroad prob¬ 
lems. Under these statutes it was held that inas¬ 
much as commercial railroads and street railways 
were classified separately by the legislatures, electric 
street railways would not be deemed to be embraced 
within the general term “railroad” as used in such 
acts. The principal of these cases, which cite the 
others, are R. R. Commission v. Market Street R. R. 


CASES BROUGHT IN THE COMMERCE COURT. 345 

Co., 132 Cal., 677 (65 Pac., 1065) and Sams v. St. 
Louis, etc., Ry. Co., 174 Mo., 53 (73 S. W. Rep., 686). 
In each of these there was a vigorous dissenting 
opinion. 

No court decision has been found directly involv¬ 
ing an interpretation on this point of the Federal 
act to regulate commerce, although in the Employ¬ 
ers’ Liability cases (207 U. S., 463, at 497) Mr. 
Justice (now Chief Justice) White said: “From 
the first section it is certain that the act extends to 
every individual or corporation who may be en¬ 
gaged in interstate commerce as a common carrier. 
Its all-embracing words leave no room for any 
other conclusion. It may include, for example, 
steam railroads, telegraph lines, telephone lines, 
the express business, vessels of every kind, whether 
steam or sail, ferries, bridge, wagon lines, car¬ 
riages, trolley lines, etc.” 

The conclusion of the Interstate Commerce Com¬ 
mission that it has such jurisdiction is supported 
by its earlier decision in Willson v. Rock Creek Ry. 
Co. (7 I. C. C. Rep., 83) and by its later decision 
in Beall v. Washington, Alexandria & Mt. Ver¬ 
non Ry. Co. (20 I. C. C. Rep., 406). While 
two commissioners dissented as to the jurisdic¬ 
tional question in the Rock Creek Ry. Co. case in 
1897, all concurred in the order which is sought to 
be enjoined in the present case, Prouty, C., speak¬ 
ing as well for Commissioners Knapp and Cockrell 
as for himself, making the following statement: 
“ In Willson v. Rock Creek Ry. Co. (7 I. C. C. 


346 CASES BROUGHT IN THE COMMERCE COURT. 

Rep., 83) I expressed the opinion that the act to 
regulate commerce did not apply to ordinary street 
railways. I still entertain the same opinion, but a 
majority of the commission thought otherwise in 
that case, and for the 12 years since we have uni¬ 
formly adhered to that holding. It seems to me 
that this should be accepted as the settled law for 
this body until reversed by a majority of the com¬ 
mission or disapproved by a court of competent 
jurisdiction.” 

The fact that the opinion of the majority of the 
commission in the Rock Creek Railway Co. case 
has been acted on for so many years should compel 
us to hesitate before adopting an interpretation of 
the act contrary to that of the commission. On the 
other hand, the opinion of such experienced judges 
as granted the preliminary injunction in the pres¬ 
ent case and the doubts of our colleague, the pre¬ 
siding judge of this court, while chairman of the 
commission, and of his two associates, necessitate 
a careful examination of the question in the en¬ 
deavor to ascertain whether or not, even though 
certain words literally construed may be held to 
grant the jurisdiction, a reasonable interpretation 
of the entire act, in the light of its history and of 
the evils sought to be remedied and of the later 
amendments, supports the literal construction; in 
a word, whether sound interpretation of both the 
spirit and the letter of the statute sustains the 
jurisdiction of the commission. 


CASES BROUGHT IN THE COMMERCE COURT. 347 

There is no question that Congress could have 
granted jurisdiction over interstate street railway 
companies carrying only passengers. Neither is it 
controverted that, under the act, the commission has 
jurisdiction over some corporations engaged in inter¬ 
state transportation of passengers alone, as well as 
over some corporations engaged in interstate trans¬ 
portation using electricity instead of steam as the 
motive power. But it is argued that, as the act 
itself shows, Congress never intended to exercise its 
power of regulation over all persons or corporations 
engaged in interstate transportation (having ex¬ 
pressly excluded water carriers, for instance, except 
where operating in direct connection with a railroad 
under a common arrangement for continuous car¬ 
riage); that the evils which compelled the interven¬ 
tion of Congress were due to the acts and omissions 
of the great railroad systems; that street railways in 
1887 were ordinarily purely local and municipal, op¬ 
erated mostly by animal power and fully regulated 
by municipal ordinances; that many of the provisions 
of the act are entirely inapplicable to street railways; 
that commercial railroads, operated ordinarily by 
steam and vested with rights of eminent domain, are 
generally differentiated in legislation from street rail¬ 
ways operated to-day ordinarily by electricity, gen¬ 
erally not endowed with the right of eminent domain, 
and running usually upon city streets and public 
highways and not on private property; and that for 
these, as well as for other reasons, electric interurban 


348 CASES BROUGHT IN THE COMMERCE COURT. 


passenger street railways are not included within the 
classes of common carriers over which jurisdiction was 
granted by section 1 of the act. The relevant part 
of this section as it was in force when these proceed¬ 
ings were begun in the Circuit Court is copied. 1 

Intermediate between the ordinary urban street 
railways which, in the case of cities or towns near 
each other, whether in the same State or not, be¬ 
come State or interstate interurban surface rail¬ 
ways carrying only passengers, and the commer¬ 
cial railroads carrying passengers and freight and 
operated usually by steam, are the so-called inter¬ 
urban electric roads. These have been organized, 

1 Sec. 1 . That the provisions of this act shall apply to any corporation 
or any person or persons engaged in the transportation of oil or other com¬ 
modity, except water and except natural or artificial gas, by means of pipe 
lines, or partly by pipe lines and partly by railroad, or partly by pipe lines 
and partly by water, who shall be considered and held to be common 
carriers within the meaning and purpose of this act, and to any common 
carrier or carriers engaged m the transportation of passengers or property 
wholly by railroad (or partly by railroad and partly by water when both 
are used under a common control, management, or arrangement for a con¬ 
tinuous carriage or shipment) from one State or Territory of the United 
States or the District of Columiba to any other State or Territory of the 
United States or the District of Columbia, or from one place in a Territory 
to another place in the same Territory, or from any place in the United 
States to an adjacent foreign country, or from any place in the United States 
through a foreign country to any other place in the United States, and also 
to the transportation in like manner of property shipped from any place in 
the United States to a foreign country and carried from such place to a port 
of transshipment or shipped from a foreign country to any place in the 
United States and carried to such place from a port of entry either in the 
United States or an adjacent country: Provided, however, That the pro¬ 
visions of this act shall not apply to the transportation of passengers or 
property, or to the receiving, delivering, storage, or handling of the prop¬ 
erty wholly within one State and not shipped to or from a foreign country 
from or to any State or Territory as aforesaid. 

The term “common carrier” as used in this act shall include express 
companies and sleeping-car companies. The term “railroad,” as used in 
this act, shall include all bridges and ferries used or operated in connection 
with any railroad, and also all the road in use by any corporation operating 
a railroad, whether owned or operated under a contract, agreement, or 
lease, and shall also include all switches, spurs, tracks, and terminal facili¬ 
ties of every kind used or necessary in the transportation of the persons 01 
property designated herein, and also all freight depots, yards, and grounds 
used or necessary in the transportation or delivery of any of said property. 


CASES BROUGHT IN THE COMMERCE COURT. 349 

or at any rate have become important factors in 
transportation, since 1887. They usually carry 
mail, express matter, and some freight as well as 
passengers, and do not only a local business in 
more than one city and between cities but also be¬ 
tween city and country. It is conceded by counsel 
that corporations operating such roads, even 
though differing in many respects from so-called 
commercial railroads, come within the jurisdiction 
of the commission when engaged in interstate trans¬ 
portation. The commission so held in C. & E. Elec . 
R. R. Co. v. I. C. R. R. et al. (13 I. C. C. Rep., 20) 
and C. & C. Traction Co. v. B. & 0. S. W. R. R. Co. 
(20 I. C. C. Rep., 486). In Nebraska and some 
other States corporations operating such inter- 
urban roads are, moreover, created under the 
general railroad acts. 

The present street railway company differs from 
this class of interurban roads in that it is created 
under the street railway act of Nebraska; it does 
not and is not empowered to carry freight; and, 
moreover, unlike some interurban roads, it has no 
right of eminent domain. Like these, however, it 
carries mail; it serves not one but two cities and 
several towns, villages, and resorts; and though the 
bill of complaint alleges that the rails of the street 
railway company are all on streets and highways, 
it does not deny the statement in the report of the 
commission, referring probably to the leased lines 
of the bridge company, that the rails are not all 
laid in streets and highways, but for some distance 


350 CASES BROUGHT IN THE COMMERCE COURT. 

run over private right of way and over the bridge 
across the Missouri River. 

While, as complainant urges, the Nebraska cor¬ 
poration is the only party actually affected by the 
order, nevertheless the order is directed against it 
not in relation to its business as a local Nebraska 
street railway corporation, but to its business as a 
carrier engaged in interstate transportation. As 
such carrier it is the successor of the Iowa corpora¬ 
tion, the bridge company. Whatever may be the 
latter’s charter limitations as an Iowa corporation, 
it erected the bridge and the lines thereon (both 
now leased to and operated by the street railway 
company) under power granted to it by Congress 
to construct, operate, and maintain the bridge and 
a “ steam, electric * * * or other line of rail¬ 

way.” 

Whether or not the street railway company is 
empowered as a Nebraska corporation to operate 
the bridge and the Iowa lines is immaterial in this 
case; it is, rightly or wrongly, engaged in their opera¬ 
tion, and it is, therefore, a common carrier engaged 
in the interstate transportation of passengers by 
electric railway. 

It is likewise immaterial to this inquiry that the 
street railway company is created under the street 
railway and not under the commercial railroad act of 
Nebraska. If, soundly interpreted, the Federal act 
gives the commission jurisdiction over such electric 
railways, State legislation is powerless to limit or to 
prevent such grant. 


CASES BROUGHT IN THE COMMERCE COURT. 351 

Does, then, the lack of statutory power to carry 
freight and to exercise the right of eminent domain 
so differentiate such a corporation as this street rail¬ 
way company from the modern interurban roads as 
to exempt it from the jurisdiction of the commission? 

Great stress is laid upon a statement by Senator 
Cullom, chairman of the Senate committee, when the 
original act of 1887 was under consideration (Cong. 
Rec., vol. 17, pt. 4, p. 3472), that: “The bill is not 
intended to affect the stagecoach, the street railway, 
the telegraph lines, the canal boat, or the vessel em¬ 
ployed in the inland or coasting trade, even though 
they may be engaged in interstate commerce, because 
it is not deemed necessary or practicable to cover 
such a multitude of subjects.” 

But whatever view may have been so expressed, it 
can not determine the correct interpretation of the 
act, particularly as it now stands, with all the changes 
that have been introduced since 1887. 

If the language be broad enough to include such 
a corporation as the present street railway com¬ 
pany, and there is no contention but that “ rail¬ 
road ” may be and frequently is synonymous with 
or inclusive of “street railways,” it is, moreover, 
immaterial that Congress may not specifically have 
intended to confer jurisdiction over the few com¬ 
paratively insignificant interstate horse street rail¬ 
ways of 25 years ago. 

A statute of the scope of the interstate-commerce 
act, designed to regulate the vast interstate trans¬ 
portation business of the country, is not to be nar- 


352 CASES BROUGHT IN THE COMMERCE COURT. 

rowly interpreted—any more than the Constitu¬ 
tion—in accordance with the economic or physical 
conditions prevailing at the time of its adoption. 
Then, too, the decision in Wabash, St. Louis , etc., 
Railway Co. v. Illinois (118 U. S., 557), definitely 
denying to the States the right to fix or regulate 
interstate rates for passengers, and thereby neces¬ 
sitating some congressional action, is as applicable 
in its reasoning to interstate street railway rates as 
to those of commercial railroads. Unless the com¬ 
mission has jurisdiction over those rates they are 
absolutely uncontrolled. 

As noted above, while Congress has expressly ex¬ 
cluded water carriers, except when operated in 
direct connection with a railroad, it has not ex¬ 
pressly excluded street railways. Moreover, the act 
has been several times amended since the Rock 
Creek Railway Co. case; and not only has Congress 
thus by its failure to exclude street railways ap¬ 
parently concurred in the construction there given, 
but by the latest amendment it has, in fact, given its 
apparent sanction thereto. 

In 1910 section 15 of the act was amended to read: 
“ The. commission shall not, however, establish any 
through route, classification, or rate between street 
electric passenger railways not engaged in the gen¬ 
eral business of transporting freight in addition to 
their passenger and express business and railroads 
of a different character,” which is the first specific 
mention of street electric passenger railways. This 
proviso, following the grant of power to establish 


CASES BROUGHT IN THE COMMERCE COURT. 353 

through rates, etc., between railroad carriers, would 
have been totally unnecessary unless the commis¬ 
sion had theretofore had jurisdiction over street 
electric passenger railways. Congress, therefore, 
must have enacted the legislation of 1910 upon the 
assumption that such jurisdiction had been con¬ 
ferred upon the commission by the original act. 

The argument that many of the requirements of 
the act would be impossible of accomplishment by 
street railways does not impress us, inasmuch as 
this is at least equally true of sleeping-car com¬ 
panies, pipe lines, telegraph and telephone com¬ 
panies, all of which are expressly covered by the 
statute. As to each of them only such of its pro¬ 
visions as are applicable will be deemed to refer to 
such companies, respectively. 

The frequent repetition of the phrase “passen¬ 
gers or freight” clearly indicates that a carrier of 
passengers only is as subject to regulation by the 
commission as is a carrier of both freight and 
passengers. 

Finding substantially nothing either in the 
language of the statute or in the history of this 
legislation that indicates an intent to exclude inter¬ 
state passenger street railways from its operation, 
and finding, on the contrary, that the words of the 
act are broad and comprehensive enough to include 
them and that some at least of the evils sought to 
be remedied by this legislation can be corrected 
only if the commission have such jurisdiction, we 
are compelled to differ from the views expressed by 

48250—S. Doc. 789, 62-2-23 


354 CASES BROUGHT IN THE COMMERCE COURT. 

the Circuit Court in granting the preliminary injunc¬ 
tion, and to hold that power has been delegated to 
the commission to regulate rates of transportation 
by such companies as the complainants herein, which 
requires us to sustain the demurrer of the defendants 
and to dismiss the bill. And it is so ordered. 


United States Commerce Court. 


No. 31. —October Session, 1911. 


The Pennsylvania Railroad Company, 
petitioner, 

v . 

The Interstate Commerce Commission, 

RESPONDENT. 

The United States et al., interveners. 


ON PINAL HEARING. 

(For opinions of the Interstate Commerce Com¬ 
mission see 19 I. C. C. Rep., 356 and 392.) 

i Mr. F. B. McKenney, with whom Mr. Henry 
Wolf Bikle , Mr. John G. Johnson , and Mr. Francis 
I. Gowen were on the brief, for petitioner. 

Mr. Blackburn Esterline , special assistant to the 
Attorney General, with whom Mr. James A. Fow¬ 
ler , assistant to the Attorney General, w T as on the 
brief, for the United States. 

Mr. P. J. Farrell for Interstate Commerce Com¬ 
mission. 





356 CASES BROUGHT IN THE COMMERCE COURT. 


Mr. A. M . Liveright for Hillsdale Coal & Coke 
Co. and Clark Brothers Coal Mining Company. 

Mr. William A. Glasgoiv, jr for W. F. Jacoby & 
Company. 

Before Knapp, presiding judge, and Archbald, 
Hunt, Carland, and Mack, judges. 


i [December 5, 1911.] 

Knapp, Presiding Judge: 

On January 1, 1906, the petitioner adopted and 
put in force the following rule or regulation for 
the allotment and distribution of cars to bituminous 
coal mines: 

Commencing January 1st, 1906, assigned cars, 
i. e., cars for Pennsylvania Railroad fuel supply, 
foreign railroad cars specially consigned for the 
fuel supply of railroads consigning such cars, and 
individual cars assigned by the owners to specified 
mines for loading, will be charged against the ca¬ 
pacity of the mines at which they are placed. The 
difference between the rated capacity of a mine and 
the capacity of the assigned cars placed for loading 
will be the rated capacity on which all other cars 
will be prorated. 

Some two years later, as the record indicates, cer¬ 
tain mine operators, viz, The Hillsdale Coal & Coke 
Company, Clark Brothers Coal Mining Company, 
and W. F. Jacoby & Company, filed complaints 
against petitioner with the Interstate Commerce 
Commission, alleging that the regulation above 


CASES BROUGHT IN THE COMMERCE COURT. 357 

quoted was discriminatory, and therefore unlawful, 
the proceedings being known on the Commission’s 
docket as Nos. 1063,1111, and 1139. To these com¬ 
plaints answers were made in due time, and the 
Commission, on March 7, 1910, after full hearing, 
entered two orders, one entitled in No. 1063 and the 
other in Nos. 1111 and 1139. These orders are sub¬ 
stantially alike, and the material parts of each read 
as follows: 

This case being at issue upon complaint and 
answer on file, and having been duly heard and sub¬ 
mitted by the parties, and full investigation of the 
matters and things involved having been had, and 
the Commission having, on the date hereof, made 
and filed a report containing its conclusions thereon, 
which said report is made a part hereof; and it 
appearing that it is and has been the defendant’s 
rule, regulation, and practice, in distributing coal 
cars among the various coal operators on its lines 
for interstate shipments during percentage periods, 
to deduct the capacity in tons of foreign railway 
fuel cars, private cars, and system fuel cars, in the 
record herein referred to as “ assigned cars,” from 
the rated capacity in tons of the particular mine re¬ 
ceiving such cars and to regard the remainder as 
the rated capacity of that mine in the distribution 
of all “ unassigned ” cars: 

It is ordered, That the said rule, regulation, and 
practice of the defendant in that behalf unduly dis¬ 
criminates against the complainant and other coal 
operators similarly situated and is in violation of 
the third section of the act to regulate commerce. 


358 CASES BROUGHT IN THE COMMERCE COURT. 

It is further ordered, That the defendant be, and 
it is hereby, notified and required on or before the 
1st day of October, 1910, to cease and desist from 
said practice and to abstain from maintaining and 
enforcing its present rules and regulations in that 
regard, and to cease and desist from any practice 
and to abstain from maintaining any rule or regu¬ 
lation that does not require it to count all such as¬ 
signed cars against the regular rated capacity of the 
particular mine or mines receiving such cars in the 
same manner and to the same extent and on the 
same basis as unassigned cars are counted against 
the rated capacity of the mines receiving them. 

The dates fixed for these orders to become effect¬ 
ive were afterwards postponed to December 1, 
1910, at which time they went into effect and have 
since been complied with by petitioner. In the 
meantime, and on October 4, 1910, the bill herein 
was filed against the Commission, in the Circuit 
Court of the United States for the Eastern District 
of Pennsylvania, to set aside and annul the orders 
in question for reasons that will be hereafter stated. 
Pleading to this bill, the Commission demurred to 
the first nine paragraphs and answered, by admis¬ 
sions and denials only, the allegations in the re¬ 
maining paragraphs. About the same time the 
Hillsdale Coal & Coke Company and Clark Broth¬ 
ers Coal Mining Company, the complainants before 
the Commission in Nos* 1063 and 1111, obtained 
leave from the Circuit Court to intervene, and 
thereupon filed their joint demurrer to the bill, 
specifying various grounds of objection thereto. 





CASES BROUGHT IN THE COMMERCE COURT. 359 

The case was transferred to this court upon its or¬ 
ganization, and here the United States intervened, 
on leave granted, and adopted as its own the demur¬ 
rer and answer of the Commission. When the case 
came on for final hearing on the pleadings then on 
file, the firm of W. F, Jacoby & Company, complain¬ 
ants before the Commission in No. 1139, were 
allowed to intervene, and they also adopted as their 
own the pleadings of the other interveners. The 
sole question to be decided is the power of the Com¬ 
mission to make the orders which the suit seeks to 
set aside, and that question arises on the demurrers 
above mentioned. 

The authority of the Commission to regulate the 
distribution of cars, particularly coal cars, in times 
of car shortage has been the subject of considerable 
litigation; and such authority has been so fully 
upheld and defined in recent decisions of the Su¬ 
preme Court that any extended discussion of this 
case would seem to be unsuitable. 

It is admitted, or at least not denied, that the 
Commission had jurisdiction of the parties to and 
the subject matter of the proceedings which re¬ 
sulted in the orders sought to be enjoined, and no 
question is made as to the regularity of those pro¬ 
ceedings. Indeed, the precise grounds upon which 
these orders are claimed to be illegal are not made 
altogether clear, though it is less difficult to discern 
the purpose of petitioner in prosecuting the suit. 
It seems to be conceded that if the orders apply only 
to cars furnished for interstate shipments—as the 


360 CASES BROUGHT IN THE COMMERCE COURT. 

recital which precedes the mandatory provisions 
might be held to imply—they are undoubtedly valid. 
But the petitioner contends that they apply also, or 
may be construed and enforced by the Commission 
as applying, to cars for intrastate as well as inter¬ 
state shipments, and that so construed they are in 
excess of the Commission’s authority; and this ap¬ 
pears to be the sole objection upon which petitioner 
relies. 

Assuming without deciding that the orders in 
question should be or can be so interpreted, we are 
nevertheless of opinion that they are within the 
powers delegated to the Commission. In the course 
of its business as a common carrier the petitioner 
transports large quantities of coal to both intrastate 
and interstate destinations, and its cars are used 
indiscriminately in this service. The coal opera¬ 
tors whose complaints w^ere investigated by the 
Commission, and at whose instance the orders were 
made, ship their products to points within or points 
without the State of Pennsylvania, as market condi¬ 
tions or other trade interests may dictate. A large 
part of the business is interstate, but it is conducted 
in its entirety by shipper and carrier alike as a unit 
of operation with little or no regard to the bounda¬ 
ries of the State in which the traffic originates. 

In view of these facts, which are wholly undis¬ 
puted, we see no reason to doubt the authority of 
the Commission to make these orders, even though 
they are intended to have the application and effect 
which petitioner appears to apprehend This con- 


CASES BROUGHT IN THE COMMERCE COURT. 361 

elusion necessarily follows, as we conceive, from 
the principles so clearly stated and so instruc¬ 
tively discussed by Mr. Justice (now Chief Jus¬ 
tice) White in Interstate Com. Com’n v. Illinois 
Central R. Co. (215 U. S., 452). Indeed, we are 
unable to find any substantial basis for distinguish¬ 
ing that case from the one at bar. The subject mat¬ 
ter is the same in both, the facts are strikingly 
similar, and the orders of the Commission of nearly 
identical import. In that case, as in this, the Com¬ 
mission found as a fact, upon evidence which per¬ 
mitted different inferences to be drawn, that the 
regulations complained of operated with discrimi¬ 
nating effect, and under such circumstances the con¬ 
clusions of the Commission, as to matters within its 
jurisdiction, are binding upon the courts. 

This conclusion is fortified by the recent decision 
of the Supreme Court in Southern Railway Co. v. 
United Stales (decided October 30, 1911). That 
case, it is true, arose under the safety-appliance 
laws, but the controlling principle involved applies 
equally, in our judgment, to the question here pre¬ 
sented. 

It may be true, as petitioner contends, that the 
rules condemned by the Commission are more equi¬ 
table than those which conform to the orders in 
question, but that would in no wise justify annul¬ 
ling the orders, as was distictly held in the Illinois 
case, supra. 

It may also be true that the enforcement of regu¬ 
lations in conformity with these orders, if applied 


362 CASES BROUGHT IN THE COMMERCE COURT. 

to cars for intrastate as well as interstate ship¬ 
ments, would result in some conflict with the duties 
of petitioner under the laws of Pennsylvania— 
though how this could happen is not very appar¬ 
ent—but if this is or proves to be the case, it fur¬ 
nishes no ground for our interference, since Federal 
authority to the full extent that it may be exerted 
supersedes and limits State authority. 

Holding this opinion, we see no occasion for con¬ 
struing these orders. The sole question with us is 
the question of power; and if the orders here in¬ 
volved, upon any reasonable construction of their 
provisions, are within the powers conferred upon 
the Commission, the exercise of those powers, under 
the circumstances of this case, must be upheld. 

The demurrers should be sustained and the peti¬ 
tion dismissed with costs, and it will be so ordered . 

(Oakland, Judge, concurring: 

I concur in the result reached in this case for 
the reason that the order of the Commission when 
properly construed only relates to the distribution 
! of coal cars for interstate shipment, and that the 
finding of the Commission upon the question of 
unlawful discrimination on the record presented 
to us is conclusive. 

Upon the other matters discussed in the opinion 
of the court, I express no opinion. 


United States Commerce Court. 


No. 35.— February Session, 1912. 


The Denver & Rio Grande Railroad Co., 
petitioner, 

V. 

The Interstate Commerce Commission, respond¬ 
ent. The United States, intervening re¬ 
spondent. 


ON FINAL HEARING. 

(For opinion of the Interstate Commerce Commis¬ 
sion, see 17 I. C. C. Rep., 225.) 

Mr. Joel F. Vaile, with whom Mr. E. N. Clark and 
Mr. A. C. Campbell were on the brief, for petitioner. 

Mr. P. J. Farrell, for the Interstate Commerce 
Commission. 

Air. Blackburn Esterline, special assistant to the 
Attorney General, with whom Mr. Winfred T. Deni¬ 
son, Assistant Attorney General, was on the brief, 
for the United States. 

Before Knapp, Presiding Judge, and Archbald, 
Hunt, Carland, and Mack, Judges. 





364 CASES BROUGHT IN THE COMMERCE COURT. 

[April 9, 1912.] 

Knapp, Presiding Judge: 

This suit was brought to set aside an order of the 
Interstate Commerce Commission, dated November 
26, 1909, which in effect required petitioner, the 
Denver & Rio Grande Railroad Co., to reduce its 
rate on beer in carloads, from Pueblo, Colo., to Lead- 
ville, Colo., when part of a through transportation 
from St. Louis, Mo., to Leadville, from 45 cents to 
30 cents per hundred pounds. 

The principal ground upon which the order of the 
Commission is claimed to be invalid, and the only 
one that needs to be discussed, is that the order 
relates to the transportation of property received, 
handled, transported, and delivered wholly within 
one State, which is said to be not within the juris¬ 
diction of the Commission because of the first pro¬ 
viso in section one of the act to regulate commerce. 
It is conceded that the transportation in question 
was interstate commerce, because the traffic was 
carried by continuous movement from a point in one 
State to a point in another State, and was therefore 
subject to the regulating power of Congress, but the 
contention is made that the proviso mentioned covers 
such transportation as is here involved, and there¬ 
fore excludes it from the authority of the Commis¬ 
sion. The facts upon which this contention is based 
appear to be as follows: 

The Missouri Pacific Railway Co. operates a line of 
railway from St. Louis to Pueblo, where it connects 
with a line of petitioner from Pueblo to Leadville 


CASES BROUGHT IN THE COMMERCE COURT. 365 

and beyond. The rate affected by the order was 
applied to carload shipments of beer which origi¬ 
nated in St. Louis during the years 1907 and 1908, 
and were transported therefrom by railroad through 
Pueblo to Leadville. The shipments in question 
were hauled by the Missouri Pacific to Pueblo and 
there delivered by that carrier without break of bulk 
to the Denver & Rio Grande, which completed the 
haul to Leadville. At the time these shipments 
moved, there was no joint rate of the two roads 
applying from St. Louis to Leadville, and the through 
charge was the local rate of the Missouri Pacific 
from St. Louis to Pueblo plus the local rate of peti¬ 
tioner from Pueblo to destination. In this connec¬ 
tion it appears that petitioner had no joint rates with 
any of its eastern connections at Pueblo, or other 
Colorado common points, on traffic moving to or 
from points in Colorado on its lines west of Pueblo 
and other Colorado common points, but was a party 
to joint tariffs on traffic moving between eastern 
points and points west of Colorado—as, for example, 
Utah and transcontinental traffic. 

The traffic in question was shipped by the William 
J. Lemp Brewing Co., of St. Louis, to the Baer Bros. 
Mercantile Co., of Leadville, the latter being the 
complainants at whose instance the rate in question 
was investigated and reduced by the Commission, 
and the transportation appears to have been con¬ 
ducted in the following manner: 

Upon receiving a carload of beer at St. Louis the 
Missouri Pacific issued to the consignor, the William J. 


366 CASES BROUGHT IN THE COMMERCE COURT. 

Lemp Brewing Co., a receipt for the same, showing on 
its face that it was to be delivered to Baer Bros. Mer¬ 
cantile Co. at Leadville, Colo., routed via the Denver & 
Rio Grande. This receipt described the articles 
shipped, with their aggregate weight, and bore a nota¬ 
tion to the effect that the shipment was tendered and 
received subject to the company’s uniform bill of 
lading. The car in which the shipment was loaded 
was then moved by the Missouri Pacific on a local 
waybill from St. Louis to Pueblo, such waybill show¬ 
ing Baer Bros. Mercantile Co. as the consignee and 
Leadville as the destination, and containing a state¬ 
ment of the contents and weight of the car, with the 
freight charges of the Missouri Pacific computed on 
its local rate from St. Louis to Pueblo. Upon arrival 
at Pueblo the car was placed on the interchange track, 
where the Missouri Pacific and petitioner delivered 
carload traffic to each other. The agent of the Mis¬ 
souri Pacific at Pueblo thereupon delivered to the 
agent of petitioner what is known as a “ transfer 
sheet,” which showed the consignor and point of 
origin, the contents and weight of the car, the freight 
charges of the Missouri Pacific to Pueblo, and also 
the consignee and destination of the shipment. The 
car was then taken from the interchange track by 
petitioner and moved to Leadville on a local way¬ 
bill which likewise named the consignor, and 
showed the consignee and destination, description of 
contents, the rate and charges to Pueblo, and the rate 
and charges of petitioner from Pueblo to Leadville. 
If the shipment were prepaid to destination, as gen- 


CASES BROUGHT IN THE COMMERCE COURT. 367 

erally seems to have been the case, the Missouri Pa¬ 
cific paid petitioner the amount of its charges from 
Pueblo to Leadville; if not prepaid, petitioner paid 
the Missouri Pacific the charges of that carrier to 
Pueblo and collected the entire charges from con¬ 
signee at destination, such payments between the two 
roads being made in daily settlements. In either case 
the physical movement and handling of the car was 
precisely the same as would be the case under a joint 
rate and through bill of lading. The movement was 
continuous from origin to destination without the 
intervention of the consignor or consignee, and so far 
as they were concerned the transportation was like 
that over a single line. In control and management, 
and in fixing their respective local rates upon which 
these shipments moved, the Missouri Pacific and peti¬ 
tioner were entirely independent of each other, and 
there was no agreement or arrangement between them 
for through transportation from points on one line to 
points on the other, except such as is indicated by or 
may be implied from the manner in which such busi¬ 
ness was handled and their mutual dealings with re¬ 
spect thereto, as above described. 

Upon these facts, as stated above, it is contended 
with much earnestness that petitioner was a purely 
local carrier within a single State of the traffic in 
question, and therefore as to such traffic not subject 
to the jurisdiction of the Commission because of the 
proviso in section 1, which reads as follows: 

“Provided, however , That the provisions of this act 
shall not apply to the transportation of passengers 
or property, or to the receiving, delivering, storage, 


368 CASES BROUGHT IN THE COMMERCE COURT. 

or handling of property wholly within one State and 
not shipped to or from a foreign country from or 
to any State or Territory as aforesaid. * * *” 

Briefly stated, the argument of petitioner’s counsel 
is this: That section 1 of the act defines the classes 
of carriers subject to its provisions; that it might be 
plausibly contended that the proviso aimed to ex¬ 
clude only their strictly intrastate business; but that 
this construction is inadmissible because of the con¬ 
cluding phrase “and not shipped to or from a foreign 
country from or to any State or Territory as afore¬ 
said/’ that is to say, because intrastate business 
destined to or coming from a foreign country is not 
excluded; and that therefore it follows that as there 
may be foreign business handled wholly in one State 
and not excluded, so there may be interstate business 
handled wholly in one State which is excluded. 

But it would also follow that the Congress, in 
devising a system of railway regulation, took care to 
include the intrastate carriage of foreign commerce— 
comparatively small in amount—and yet purposely 
exempted the intrastate carriage of interstate com¬ 
merce, which aggregates a very large volume. Only 
the plainest language would impute to the law¬ 
making body such an inconsistent and irrational 
intention. It seems clear to us that the language 
in question should not be so construed, and we 
reject the contention of petitioner because, in our 
judgment, it is based upon an erroneous hypothesis. 

Section one not only subjects to the act, first, 
certain carriers, but also, second, certain trans- 


CASES BROUGHT IN THE COMMERCE COURT. 369 

portation. The proviso relates not to the carriers 
but to the transportation, and is therefore to be 
read in connection with the second clause of the 
section and not with the first. Summarized, the 
first clause relates to carriers engaged in trans¬ 
portation (a) wholly by rail, or (b) partly by rail and 
partly by water under a common arrangement, from 
(c) State to State, or (d) from the United States to or 
through an adjacent foreign country. For example, 
carriers transporting traffic by rail from Albany to 
New York for shipment to Europe would not come 
under this definition whether or not there were a 
common arrangement for rail and water transporta¬ 
tion, but carriers engaged in moving traffic from Al¬ 
bany to New York by rail and thence by water to New 
Orleans, or from Albany to Buffalo by rail and thence 
by water to Toronto, would come within the defini¬ 
tion, if there were a common arrangement. It was 
interstate rail transportation that was primarily 
sought to be regulated, not interstate water trans¬ 
portation, and not the rail part, within a single State, 
of rail and water interstate transportation unless 
the rail carrier and the water carrier were under a 
common control management or arrangement. 

But as to transportation to a foreign country, 
unless wholly by water from point of origin to final 
destination, Congress had a different and definite 
purpose. Even though in that case there were no 
common arrangement between the rail and water 
carrier, even though no regulation of the ocean car¬ 
rier or the entirely independent lake or river carrier 

48250—S. Doc. 789, 62-2-24 


370 CASES BROUGHT IN THE COMMERCE COURT. 

was intended, nevertheless Congress deemed it impor¬ 
tant to subject to the act, and therefore by the second 
clause did subject, that part of such transportation as 
was conducted within this country, although confined 
to a single State and conducted by a line that had 
no connection of any kind with an ocean carrier or 
with any interstate traffic. Then, out of abundant 
caution, as it seems, and by way of disclaimer of 
any authority over a carrier that confined its busi¬ 
ness to one State, and was not engaged in such inter¬ 
state business as would bring it within the first clause, 
the proviso was added. The intended effect of this 
proviso was to exclude from the operation of the act 
such transportation, whether of persons or property, 
as was carried on wholly within one State, other than 
that going to or coming from a foreign country. 
Having given jurisdiction over certain transportation 
that could be conducted either in more than one or 
in only one State—that is, the inland transportation 
of commerce to or from foreign lands—it disclaimed 
jurisdiction over domestic traffic confined strictly and 
wholly to a single State. This disclaimer naturally 
contained the limiting clause “ not shipped to or from 
a foreign country,” to avoid any possible conflict with 
what immediately preceded, and to prevent an inter¬ 
pretation which would exclude the Albany-New 
York part of the Albany-New York-Europe trans¬ 
portation in the example above given. The proviso 
therefore must be regarded as a disclaimer and not as 
an exception. It could not, of course, be an excep¬ 
tion to the second grant of jurisdiction over certain 


CASES BROUGHT IN THE COMMERCE COURT. 371 

transportation, and it does not in any way refer to 
the first grant of jurisdiction over certain carriers, 
either by way of disclaimer or by way of exception. 
It results that rail carriers engaged in such transpor¬ 
tation of admittedly interstate commerce as is here 
considered were intended to be made subject to the 
act and are included in the classes of carriers to which 
the act applies. 

This construction gives consistent and appropriate 
meaning to those provisions of the first section which 
define the scope and application of the entire enact¬ 
ment. It sustains the act as a comprehensive scheme 
of regulation designed to include all interstate trans¬ 
portation wholly by railroad, or partly by railroad 
and partly by water when both are used under a 
common arrangement, and to exempt only that intra¬ 
state transportation which is not within the power 
of Congress to regulate. As was said by the Su¬ 
preme Court in Texas & Pacific Railway v. Inter¬ 
state Com. Com. (162 U. S., 212): 

“ It would be difficult to use language more un¬ 
mistakably signifying that Congress had in view the 
whole field of commerce (excepting commerce wholly 
within a State), as well that between the States and 
Territories as that going to or coming from foreign 
countries.” 

Moreover, it seems plain to us upon the undisputed 
showing in this case that these carriers, as is now 
their duty under the amended act, have in fact 
established through routes from points on one road 
to points on the other, or at least between St. Louis 


372 CASES BROUGHT IN THE COMMERCE COURT. 

and Leadville. Their physical connection at Pueblo 
by means of interchange tracks and otherwise, their 
constant acceptance of carload traffic from each 
other, their daily settlement of charges on such inter¬ 
change traffic, and their habitual course of dealing 
with each other in the handling and transfer of 
through shipments, have brought about, in our 
opinion, those mutual relations which characterize 
through routes. Indeed, it is not perceived that 
their customary conduct of such business leaves any¬ 
thing to be done—and nothing was suggested in 
answer to inquiry on the argument of the case as to 
what could be done—to create the conditions which 
constitute through routes. Apparently they are 
doing for and with each other in respect of through 
traffic practically everything that the Commission 
could require under its present power to establish 
through routes where connecting carriers have failed 
or neglected to provide such facilities. 

The sixth section of the act recognizes three kinds 
or classes of rates, namely; the rates between dif¬ 
ferent points on each carrier’s line; the joint rates 
of two or more carriers when they have established 
through routes and joint rates; and the “ separately 
established rates” applied by a carrier on through 
traffic when there is a through route but no joint 
rate. This rate in question from Pueblo to Leadville 
seems to us clearly of the latter class. It is the rate 
which petitioner provided for through transporta¬ 
tion, and it was that rate, provided and used for 
that purpose, of which complaint was made as re- 


CASES BROUGHT IN THE COMMERCE COURT. 373 

suiting in an excessive through charge, and which the 
Commission by its order reduced. The circumstance 
that it was the same in amount as the purely local 
rate of petitioner between the same points does not 
alter its character as a separately established rate 
applicable to through shipments. In our opinion 
both the carrier and the traffic were within the terms 
of the act, and the Commission had full jurisdiction 
to make the order in question. See Interstate Com. 
Com. v. Chicago , R. I. & Pac. Ry. (218 U. S., 88), 
where the Supreme Court sustained an order of the 
commission which reduced the local rates of certain 
carriers between the Mississippi and Missouri Rivers 
when applied to through traffic from eastern terri¬ 
tory. 

We do not say that a carrier located wholly within 
a State may not so conduct its business as to be in 
fact and in law a purely intrastate carrier, nor do 
we attempt to point out what such a carrier must do 
or not do to escape regulation under the act. It is 
sufficient to hold that the petitioner in this case, 
upon the undisputed and conceded facts, is subject 
to the provisions of the regulating statute as to the 
traffic and transportation here in question; and it 
follows, since no other ground of relief is presented 
by the record, that the petition should be dismissed , 
and it will be so ordered. 








United States Commerce Court. 


No. 40.— February Session, 1912. 


Norfolk & Western Railway Company, et al., 

PETITIONERS, 

V. 

United States of America, respondent. 
Interstate Commerce Commission, 
Corporation Commission of North Carolina, 

INTERVENERS. 


ON FINAL HEARING ON BILL, ANSWER, AND PROOFS. 

Mr. Albert S. Brandeis, Mr. Lucian H. Cocke, and 
Mr. R. Walton Moore for petitioners. 

Mr. Blackburn Esterline, with whom Mr. Winfred 
T. Denison was on the brief, for the United States. 

Mr. Charles W. Needham for the Interstate Com¬ 
merce Commission. 

Mr. T. W. Bickett, Attorney General of North 
Carolina, for the Corporation Commission of North 
Carolina. 

Before Knapp, Presiding Judge, and Archbald, 
Hunt, Carland, and Mack, Judges. 

[April 9, 1912.] 

Hunt, Judge: 

Some time in 1908 the Corporation Commission of 
North Carolina filed a complaint before the Interstate 

375 





376 CASES BROUGHT IN THE COMMERCE COURT. 

Commerce Commission against the Norfolk and West¬ 
ern Railway Company, the Louisville and Nashville 
Railroad Company, and the Cleveland, Cincinnati, 
Chicago and St. Louis Railway Company, alleging 
that the rates from Chicago, Cincinnati, and St. Louis 
and other western points in Ohio, Indiana, Kentucky, 
Illinois, and other States, to Winston-Salem, Dur¬ 
ham, and other points in North Carolina, on classes, 
grain and grain products, and other commodities, 
were unjust and unreasonable in and of themselves, 
and unjustly discriminatory and unduly preferential 
and prejudicial as compared with rates on the same 
commodities to Roanoke, Lynchburg, Petersburg, 
and Norfolk, in Virginia, and that the rates to Win¬ 
ston-Salem, Durham, and other places in North Caro¬ 
lina along the lines of the Norfolk and Western should 
be reduced to the same basis as obtained for the said 
Virginia cities. The Norfolk and Western Railway 
Company and the Louisville and Nashville Railroad 
Company filed a joint and several answer, denying the 
material allegations of the complaint. On May 27, 
1908, the Southern Railway Company and the Sea¬ 
board Air Line Railway and its receivers intervened 
as parties defendant, and were given the benefit of 
the answer of the Norfolk and Western and the Louis¬ 
ville and Nashville companies. On June 7, 1910, the 
Commission, after a hearing, filed its report and made 
an order to the effect that the Norfolk and Western 
Railway Company desist from charging local class 
rates on traffic from Roanoke, Virginia, to Winston- 
Salem, North Carolina, and from Lynchburg, Virginia, 


CASES BROUGHT IN THE COMMERCE COURT. 377 


to Durham, North Carolina, in excess of those named 
in the following table: 



Per 100 
pounds. 

Per ton (2,000 
pounds). 

Per carload. 

Class. 

Class. 

Class. 

K 

L 

M 

N 

O 

P 

Cts. 






10$ 

*1.00 

$1.85 

$31.00 

$21.00 

$17.00 


The local class rates in effect when the order of 
the Commission was made were as follows: 


Class. 



1 

2 

3 

4 

5 

6 

A 

B 

C 

D 

E 

F 

H 

K 


Cts. 

Cts. 

Cts. 

Cts. 

Cts. 

Cts. 

Cts. 

Cts. 

as. 

Cts. 

Cts. 

Cts. 

Cts. 

as 

Durham. 

61 

51 

42 

32 

28 

21 

17 

22 

21 

18 

28 

42 

32 

14 

Winston-Salem. 

61 

51 

42 

32 

28 

21 

17 

22 

21 

18 

28 

42 

32 

14 






_ 


_ 

. - 



— 





Class. 

L 

M 

N 

O 

P 

Durham .-. 

O O 

CT> Oi 

&3 

$2.20 

2.20 

$35.00 

35.00 

$26.00 

26.00 

$22.00 

22.00 




Petition for rehearing was filed by the Norfolk 
and Western, the Southern, and the Seaboard Air 
Line Railway Companies. Rehearing was denied. 






























































































378 CASES BROUGHT IN THE COMMERCE COURT. 

Thereafter, the Norfolk and Western Railway Com¬ 
pany, the Southern Railway Company, the Seaboard 
Air Line Railway, and the Louisville and Nashville 
Railroad Company, as petitioners, filed their joint 
petition in this court and prayed for the annulment 
of the order of June 7, 1910. After setting forth the 
proceedings had before the Commission, petitioners 
allege substantially: (1) That the reasonableness of 
the rates of the Norfolk and Western from Roanoke 
and Lynchburg to Winston-Salem and Durham was 
not in issue before the Commission; (2) that the order 
of the Commission operates to defeat the purpose of 
the Commission as expressed in its report, because 
of a mistaken view by the Commission of the effect of 
its order; (3) that the order should be set aside be¬ 
cause of an inconsistency which results in arbitrarily 
compelling the application of lower rates on certain 
traffic than the Commission found were reasonable; 
and (4) because the Commission erred and exceeded 
its authority in disregarding the interests of the 
carriers other than the Norfolk and Western. The 
Corporation Commission of North Carolina has inter¬ 
vened. The United States and the Interstate Com¬ 
merce Commission filed answers, in which they denied 
certain averments and set up the proceedings before 
the Commission. Application for a preliminary in¬ 
junction was denied by this court. Thereafter, 
evidence was heard before one of the judges of the 
court, and the case is now here upon a final hearing. 

The Norfolk and Western Railroad extends from 
Cincinnati and Columbus on the west to Norfolk, 


CASES BROUGHT IN THE COMMERCE COURT. 379 

Virginia, on the east, and to Hagerstown, Maryland, 
on the north. One of its divisions extends from Rad¬ 
ford, Virginia, to Bristol, Tennessee; another south 
from Roanoke, Virginia, to Winston-Salem, North 
Carolina, a distance of 122 miles; another division 
extends south from Lynchburg, Virginia, to Durham, 
North Carolina, a distance of 117 miles. Lynchburg is 
54 miles east of Roanoke on the main line. The South¬ 
ern Railway runs to Durham and Winston-Salem. It 
has its own rails into Louisville, St. Louis, and Evans¬ 
ville, from which points in connection with other 
roads it operates in the Carolina territory and into 
Winston-Salem and Durham. The Seaboard Air 
Line reaches Durham from the north. The Louis¬ 
ville and Nashville Railroad runs from Cincinnati 
to New Orleans, with a division extending to Norton, 
Virginia. It also runs from Nashville to St. Louis. 
Traffic over its lines to the Virginia cities is handled 
in connection with the Norfolk and Western via the 
Norton gateway, and in connection with the Chesa¬ 
peake and Ohio through the Louisville gateway, 
and in connection with the Southern through Jellico, 
Tennessee. The Norfolk and Western, with its con¬ 
nections, is the short line from Chicago to Winston- 
Salem and Durham. From Louisville, Cincinnati, 
and East St. Louis, the short line to most Carolina 
joints is via the Louisville and Nashville, and the 
Southern and its connections. Rates by this route 
fnm Chicago and East St. Louis to Carolina terri¬ 
tory are made upon combinations which do not 
exceed the Virginia cities combinations. From Louis- 


380 CASES BROUGHT IN THE COMMERCE COURT. 

ville and Cincinnati through rates are made by using 
proportional rates to Virginia cities, plus locals 
beyond, the proportionals equaling the differences 
between the Chicago rates to the Virginia cities and 
the locals from Chicago to Cincinnati. The Com¬ 
mission makes the situation clear by giving the pro¬ 
portional rates on the numbered classes in cents 
per one hundred pounds, as follows: 


Class. 1 2 3 4 5 6 

Rate. 32 28 22 15 12 10 


And exemplifies by taking the Chicago-Virginia 
cities rate on first class, which is 72 cents per one 
hundred pounds, and the Chicago-Cincinnati local, 
which is 40 cents, finding the proportional rate to be 
the difference, which is 32 cents. By adding this 
proportional to the local from Virginia cities to 
Winston-Salem and Durham, the through rate from 
Cincinnati and Louisville, first class, was made 93 
cents. The proportionals as used by the Commission 
applied to grain and packing-house products were 
respectively, 11 and 15 cents. It appears that after¬ 
wards the proportionals were taken out and thus the 
combination was the local rate to the Virginia cities 
plus the rate fixed by the Commission. 

Considering the first point made by petitioners, 
that the reasonableness of local rates between Roa¬ 
noke and Winston-Salem, and between Lynchburg 
and Dunham, was not in issue before the Commission, 
we find the allegations of paragraph 13 of the con- 
plaint before that body as follows: 





CASES BROUGHT IN THE COMMERCE COURT. 381 

“13. That the published and exacted rates be¬ 
tween stations in Virginia and West Virginia along 
the line of the Norfolk and Western Railway and sta¬ 
tions in what is known as the Durham and Winston 
divisions, along the lines of said railway in North 
Carolina, as is shown by Tariff I. C. C. No. 3156, North 
Carolina Interstate No. 1, are unjust and unreason¬ 
able, in and of themselves, and unduly discrimina¬ 
tory against the said points in North Carolina.” 

The third and fourth clauses of paragraph 12 of the 
joint and several answer of the Norfolk and Western 
and the Louisville and Nashville companies, filed be¬ 
fore the Commission, read as follows: 

“Respondent, the Norfolk & Western Railway 
Company, denies that the published and exacted rates 
between stations in Virginia and West Virginia along 
the line of respondent, and stations on what are 
known as the Durham and Winston divisions, along 
the lines of its railway in North Carolina, are unjust 
or unreasonable, in and of themselves, or unduly 
discriminatory against the said points in North 
Carolina. 

“Respondent, the Louisville & Nashville Railroad 
Company, not being in position to participate in the 
traffic between the points referred to in Paragraph 
XIII of the complaint does not therefore deem it 
essential to either deny or affirm the allegations as 
contained therein.” 

Examination of Tariff I. C. C. No. 3156, Norfolk 
and Western Railway Company, effective Novem¬ 
ber 15, 1907, shows on its face that it contains the 


382 CASES BROUGHT IN THE COMMERCE COURT. 

rates applicable to shipments from Roanoke and 
Lynchburg, Virginia, to Winston-Salem and Durham, 
North Carolina. 

The complaint also sets forth the routes from 
designated western cities, Cincinnati, St. Louis, and 
others, to Winston-Salem, Durham, and other places 
in North Carolina, and to Roanoke, Lynchburg, 
Petersburg, and Norfolk, in Virginia, called the Vir¬ 
ginia cities. In the exhibits made part of the com¬ 
plaint were the published and exacted rates from 
these western cities to the Virginia cities on certain 
numbered and lettered classes and commodities 
shown on the schedule attached to the complaint; 
and the rates from the western cities named to 
Winston-Salem, Durham, and other places in North 
Carolina on the numbered and lettered classes and on 
certain commodities were also made part of the 
complaint. It was specifically charged that mer¬ 
chants and shippers in the Virginia cities have a 
preference and advantage over merchants, manu¬ 
facturers, and shippers at Winston-Salem, Durham, 
and other places in North Carolina in the distri¬ 
bution of products, commodities, and merchandise, 
and that under the unjust and unreasonable adjust¬ 
ment of rates and charges merchants and dealers and 
others at Winston-Salem, Durham, and other North 
Carolina places have been unable to compete with 
the Virginia cities in the reshipment of merchandise 
and manufactured goods in the territory contiguous 
to Winston-Salem, Durham, and other places in 
North Carolina. As part of the complaint, an 


CASES BROUGHT IN THE COMMERCE COURT. 383 

exhibit showed that the short line distances by 
rail from the western cities to the Virginia cities 
and to Winston-Salem, Durham, and other places 
in North Carolina were over the rails of the Norfolk 
and Western. It was alleged that the rates and 
charges of the defendants for the transportation of 
the various kinds and classes of property to Winston- 
Salem, Durham, and other places in North Carolina, 
from the western cities, were unreasonable and 
unjust in and of themselves, and relatively, as com¬ 
pared with the rates and charges from the same 
points to the said Virginia cities, and that the said 
rates were unjustly discriminatory and prejudicial; 
that the rates and charges upon shipments originating 
at western cities destined to Winston-Salem, Dur¬ 
ham, and other points in North Carolina, are at a 
much greater rate per ton per mile than the rate per 
ton per mile on shipments destined to the Virginia 
cities; and that for the distances in North Carolina 
or over that portion of the distance south of the 
Virginia cities named, the rate per ton per mile is 
still greater than the rate from the point of origin 
to the said Virginia cities, and that the rates over 
that portion of the Norfolk and Western in North 
Carolina are higher than those over any portion of 
this line. The schedules of rates were referred to in 
support of the petition. 

Taking all these averments, and considering that 
there is specific mention of the Durham and Winston- 
Salem divisions of the Norfolk and Western, and 
that the local rates were necessarily included in the 


384 CASES BROUGHT IN THE COMMERCE COURT. 

through rates, as the local formed a large part of 
every through rate to the North Carolina points, it 
is easily gathered that the local rates were involved 
in the issues. It may be that if there had been a 
challenge to the complaint upon the ground that it 
was lacking in particularity, amendment might have 
been ordered, but considering that liberality of state¬ 
ment which is allowed in pleadings before the Com¬ 
mission, the investigation into such local rates was 
authorized. C. H. & D. R. R. Co. v. Interstate 
Commerce Commission , 206 U. S., 142; Siler v. 
Louisville and Nashville R. R. Co., 213 U. S., 175. 

The next contention is in substance that it appears 
from the report of the Commission that it adopted a 
mistaken view, and that this mistaken view was of 
such a character as to have vital effect upon its find¬ 
ings; and hence that this court has the power and 
should correct the error so made. This contention is 
based upon the report of the Commission, wherein it 
was assumed that “the present method of constructing 
through rates by the defendant carriers from Chicago, 
St. Louis, and Louisville, and by the Norfolk and 
Western Railway Company from Columbus, Ohio, to 
Winston-Salem and Durham, respectively, would be 
continued.” “It is our view,” the Commission ob¬ 
served, “that such injustice in the rates from these 
points of origin to the destinations involved as may 
result from the present excessive rates of the Norfolk 
and Western Railway Company from Cincinnati will 
be removed, and that for the present at least no order 


CASES BROUGHT IN THE COMMERCE COURT. 385 

need be made as to the traffic moving from the said 
points of origin other than from Cincinnati." 

Petitioners urge that the Commission, in prescribing 
maximum through rates from Cincinnati to Winston- 
Salem and Durham, disregarded the “ present method ’* 
alluded to, such method being the construction of a 
through rate on any given article of traffic from a 
western city to Winston-Salem or Durham by adding 
a fixed proportional of the rate proper between the 
western city and the Virginia city to the local between 
the Virginia city and the North Carolina destination; 
and, further, that by naming figures which do not rep¬ 
resent combinations made in the way just described, 
the relation sought to be maintained between Louis¬ 
ville and western points other than Cincinnati can 
not be preserved. The Norfolk and Western estab¬ 
lished the rates from Cincinnati as prescribed by the 
order, but no reduction of rates has been made by any 
of the other carriers. These rates before the execu¬ 
tion of the order were the same from Louisville to 
Winston-Salem and Durham as from Cincinnati to 
those points. Now it is argued that if the method 
of construction recognized by the Commission should 
be used in making new rates from Louisville—that 
is to say, adding the proportionals which are em¬ 
ployed as a factor under the present method to 
the new locals from the Virginia cities to Winston- 
Salem and Durham—the rates from Louisville will 
become less than the rates fixed for the Norfolk 
and Western from Cincinnati, although the dis¬ 
tance is greater. But granting that the order which 


386 CASES BROUGHT IN THE COMMERCE COURT. 

runs only against the Norfolk and Western does affect 
rates on other roads carrying from other points than 
Cincinnati, there is no sufficient reason advanced 
upon which this court may enjoin against the order 
of the Commission. Of course adjustments of rates 
oftentimes do have effect upon adjacent territory. 
These matters, however, were considered and ex¬ 
pressly referred to by the Commission in its report, 
saying: 

“ We are not unmindful that it is our duty to con¬ 
sider rates applied over the entire territory likely to 
be affected by a change in rates to particular points. 
It is doubtless true that a reduction in rates to Win¬ 
ston-Salem and Durham to the Virginia cities basis 
would disarrange the whole system of rates now 
based thereon and made with reference thereto. We 
have heretofore found that conditions at Winston- 
Salem and Durham do not justify the extension to 
them of the Virginia cities rates. This is not equiva¬ 
lent, however, to a finding that rates to Winston- 
Salem and Durham are reasonable. * * 

The conditions described would seem to be inev¬ 
itable, yet it is far from being a sufficient reason for 
defeating the regulation of the particular rates which 
were under direct investigation. Ordinarily, rates 
not involved in the inquiry before the Commission 
will adjust themselves to the conditions brought 
about by the order, but even though the assumption 
that they will adjust themselves is erroneous, and the 
basis for the assumption involves a mistaken factor 
as to such other rates, still it doesjiot necessarily 



CASES BROUGHT IN THE COMMERCE COURT. 387 

lead to the conclusion that the regulation of the rate 
directly involved in the order is invalid or that the 
order fixing such a rate should be annulled by judicial 
authority, provided always the rate so directly in¬ 
volved and fixed is reasonable and just for shippers 
and carriers, with relation to the particular destina¬ 
tions concerned. 

It may be, too, that the lowering of a rate between 
two distant points will result in rates to intermediate 
points over the same line being inconsistent with the 
provisions of section 4 with reference to the long and 
short haul clause of the act to regulate commerce, but 
if so, there presumably is occasion for reducing such 
rates to intermediate points. In order to sustain 
reasonable rates to intermediate points, unreason¬ 
able rates between more distant points can not be 
sustained. 

It is not for us to say whether the Commission 
has properly attached great or little weight to evi¬ 
dence adduced upon a given point, or whether the 
conclusion reached by the Commission upon testi¬ 
mony as to facts alone shows mistake as to some 
particular fact not essential or vital to the proceed¬ 
ing; or inadvertency; or is not such a conclusion as 
this court might have reached. If the particular 
matter in issue and inquired into was one of fact 
and a full hearing was afforded, and the conclusion 
reached is supported by substantial evidence, it will 
not be nullified by the courts. Interstate Commerce 
Commission v. Union Pacific R. R. Co. et al., 222 
U.S., —. 


388 CASES BROUGHT IN THE COMMERCE COURT. 

Special attention is addressed to grain rates. The 
Commission found no justification upon the facts 
appearing for condemning as unreasonable or other¬ 
wise unlawful the commodity rates on grain east- 
bound in carloads. Petitioners point out that the 
grain rate from Cincinnati to Winston-Salem and 
Durham as thus approved was 28J cents per one 
hundred pounds; that the commodity rate on grain 
in carloads from Cincinnati to Roanoke and Lynch¬ 
burg is 14 cents, and that the any-quantity rate pre¬ 
scribed from Roanoke and Lynchburg to Winston- 
Salem and Durham is 13 cents, making a total of 27 
cents, and it is said that under the fourth section as 
amended, carriers being compelled to observe the 
combination of intermediate rates, the Norfolk and 
Western has found it necessary to publish a rate of 
27 cents. From this it is argued that although 28J 
cents was given “the stamp of reasonableness” by 
the Commission as the grain rate from Cincinnati to 
Winston-Salem and Durham, compliance with the 
order results in a rate of 27 cents. The testimony 
heard in this court upon the issues presented goes to 
show that the Cincinnati-Roanoke grain rate of 14 
cents was compelled by competition with the Chesa¬ 
peake and Ohio, and that with the 14 cent rate from 
Cincinnati to Roanoke and Lynchburg, the Com¬ 
mission having prescribed the 13 cent local rate, the 
Norfolk and Western had no alternative other than 
to make a through rate to Winston-Salem and Dur¬ 
ham of 27 cents. About 15 per cent of the traffic 
hauled by the Norfolk and Western to Winston- 


CASES BROUGHT IN THE COMMERCE COURT. 389 

Salem and Durham is grain. Carrying out the argu¬ 
ment, it is said that other carriers of grain to 
the North Carolina destinations must make their 
rates correspond to the 27 cent rate of the Norfolk 
and Western and suffer the reduction of revenue 
inevitably to follow. In this connection the evi¬ 
dence shows that of the Seaboard Air Line traffic 
from the west in 1910, 55 per cent was grain and 
grain products delivered at Durham, while only about 
30 per cent of such products was delivered there in 
1911. It would seem, however, that there is nothing 
to prevent the carriers interested from going before 
the Commission and asking that they be allowed to 
make a through grain rate of 28J cents instead of 
27 cents, which is the combination of the local rates. 
Apparently there is no restriction upon the power 
of the Commission to determine such a question, in 
view of the peculiar situation with reference to the 
Virginia cities rates. But without deciding whether 
or not the Commission, under section 4 of the Act to 
regulate commerce as amended in 1910, is authorized 
to allow a through rate which is higher than the 
aggregate of the intermediate rates, it can not be 
successfully disputed that the order of the Commis¬ 
sion reducing the rates from Lynchburg and Roanoke 
to the North Carolina points involved to 13 cents for 
the distances—122 miles to Winston-Salem and 117 
miles to Durham—was in itself the fixing of a rea¬ 
sonable and just rate. Assuming that the rate from 
Cincinnati to Roanoke and Lynchburg is forced by 
competition to an unreasonably low point, still the 


390 CASES BROUGHT IN THE COMMERCE COURT. 

carrier has no right to complain because it can not 
maintain an unreasonably high rate between Roanoke 
and Lynchburg and Winston-Salem and Durham. 

Stress is laid upon what is called a “ misconcep¬ 
tion’ 1 of the relation of other carriers to the western 
business, in that the Commission stated that the 
carriers which intervened before it did not “ in any 
significant amount participate in traffic to Winston- 
Salem and Durham from the points in question.” 
Again we encounter what was a question of fact. 
The report of the Commission refers to the pressure 
upon the attention of the Commission of the “ possi¬ 
bility of disaster ” to the interests of the intervening 
carriers if the prayer of the petition should be granted. 
Evidently there was evidence showing that besides 
the Norfolk and Western, the Louisville and Nash¬ 
ville, the Southern, and the Seaboard Air Line Rail¬ 
roads participated in the traffic. In the motion 
for a rehearing the moving parties recognized this, 
saying: “ While there is no detailed evidence on the 
subject in the record, it was made to appear that the 
intervening carriers are very largely interested.” 
True, in this court it was testified that in 1910, for 
instance, the Louisville and Nashville delivered at 
Norton 44.3 per cent of the total tonnage delivered at 
Winston-Salem by the Norfolk and Western, and in 
1911, 28.8 per cent, and that in 1910 of the total 
tonnage delivered by the Norfolk and Western at 
Durham 49.2 per cent was received from the Louis¬ 
ville and Nashville at Norton, and in 1911, 39.1 per 
cent, and it was the opinion of the traffic manager 


CASES BROUGHT IN THE COMMERCE COURT. 391 

of the Norfolk and Western that this decrease in 
the Norton percentage was accounted for by the 
lowering of the rates below the Louisville and Nash¬ 
ville rates via Norton. The testimony also tended 
to show that in September, 1910, the Southern 
delivered at Durham 384,993 pounds of the western 
traffic, and in September, 1911, only 256,090 pounds, 
and to Winston-Salem proper from Cincinnati and 
passing through Cincinnati in September, 1910, via 
the Southern the movement was 332,413 pounds, and 
in September, 1911, 120,104 pounds; and that from 
and via Cincinnati and from and via other Ohio 
River crossings said to be affected by the reduced 
rates the movement via the Southern in September, 

1910, was 2,213,711 pounds, and in September, 

1911, 1,609,611 pounds. There was also evidence 
tending to show that certain business that formerly 
moved into Durham from Petersburg and Rich¬ 
mond over the Seaboard Air Line now moves from 
Lynchburg by reason of the reduction ordered by 
the Commission. We must remember, however, 
that the Commission was expressing its opinion 
upon the evidence which was before it when it made 
the order of June 7, 1910; hence so much of the evi¬ 
dence as shows that a volume of business which 
these other lines once had has been lost since the 
order of the Commission went into effect is not helpful 
in getting at the exact meaning of the term “ sig¬ 
nificant amount” as used by the Commission. 
Some substantial participation having been proved 


392 CASES BROUGHT IN THE COMMERCE COURT. 

before the Commission, whether the extent of it was 
worthy of being characterized as “significant” be¬ 
came a matter of inference from facts, and it is 
beyond the power of this court to say that as a 
matter of law the order must fall because of such 
characterization. 

We observe this express language of the Commis¬ 
sion in its report: “We have considered these rates 
from the viewpoint of distance and transportation 
conditions, by the amount of revenue received, as 
shown by per ton-mile calculations, and drawn into 
consideration all matters which in any way relate to 
traffic between the points involved.” The petition 
for a rehearing set forth with care the grounds upon 
which the petitioners conceived the Commission had 
erred and misapprehended facts. The rehearing was 
denied, and no cause is made to appear to us for be¬ 
lieving that the conclusions of the Commission should 
be disturbed. 

The rates ordered to be put in force by the Norfolk 
and Western being reasonable, we can not say that 
because other roads have not met the reduced rates 
and are losing traffic as a consequence the order of 
the Commission should be interfered with. 

Decree for respondents. 


United States Commerce Court. 


No. 42— October Session, 1911. 


The Arkansas Fertilizer Company, petitioner, 
v. 

The United States, respondent, and The Inter¬ 
state Commerce Commission, intervening 

RESPONDENT. 


ON FINAL HEARING. 

Mr. E. L. Me Haney for petitioner. 

Mr. James A. Fowler, assistant to the Attorney 
General, and Mr. Blackburn Esterline , special assist¬ 
ant to the Attorney General, for the United States. 

Mr. Charles W. Needhami for Interstate Commerce 
Commission. 

Before Knapp, Presiding Judge, and Archbald, 
Hunt, Carland, and Mack, Judges. 

[Dec. 5, 1911.] 

Knapp, Presiding Judge: 

This case involves the meaning and application of 
a provision in the sixteenth section of the act to 
regulate commerce, as amended in 1906, which reads 
as follows: 11 All complaints for the recovery of dam - 
ages shall be*filed with the commission within two years 

393 





394 CASES BROUGHT IN THE COMMERCE COURT. 

from the time the cause of action accrues” What is 
the “cause of action” here intended to be defined 
and when does it “accrue?” 

The typical facts appearing in the record disclose 
the concrete form in which the question is now pre¬ 
sented. In February, 1907, the petitioner shipped 
a carload of fertilizer from Little Rock, Arkansas, to 
Ravanna, Arkansas, billed to one A. S. Stuckey. The 
shipment w~as routed over the St. Louis, Iron Moun¬ 
tain & Southern, and the Kansas City Southern, 
and moved for a short distance in the State of Texas, 
thereby making it interstate. On February 15, 1907, 
the petitioner prepaid charges at the rate of 15f cents 
per 100 pounds, amounting to $85.05, and later the 
delivering carrier demanded the additional sum of 
$66.15, based on a rate of 28 cents, which was the 
lawful tariff rate in force at the time the shipment 
moved, and this sum was paid by petitioner on 
March 30, 1910. 

In September, 1910, some three years and seven 
months after the transportation service was per¬ 
formed, the delivering carrier, in behalf of petitioner, 
applied to the Interstate Commerce Commission for 
authority to refund the sum of $59.40 (which would 
result in a charge of 17 cents on the shipment in 
question), making the express admission that the 
tariff rate of 28 cents, which petitioner had paid as 
above stated, was unjust and unreasonable, and 
agreeing to maintain for the required period a rate of 
17 cents, which was established by a tariff filed with 
the Commission about that time. Following its 


CASES BROUGHT IN THE COMMERCE COURT. 395 

ruling in Blinn Lumber Co. v. Southern Pacific Co. 
(18 I. C. C. Rep., 430), the Commission denied the 
application on the ground that it was without juris¬ 
diction -to allow the refund, because more than two 
years had intervened between delivery of the ship¬ 
ment to the consignee and the filing of the claim for 
reparation. Thereafter and on June 5, 1911, the 
petition herein was filed to set aside and annul the 
order of the Commission. The United States filed 
an answer, and the Commission also intervened and 
answered. The petitioner thereupon filed motions 
to dismiss the answers as not stating a defense to the 
cause of action alleged in the petition. On this 
record, and the briefs of counsel, the case was sub¬ 
mitted without oral argument. 

The answer of the United States, which is in the 
nature of a special demurrer, alleges that the facts 
set forth in the petition do not constitute a cause of 
action, and also alleges that this court is without 
jurisdiction to hear and determine the case. Juris¬ 
diction is challenged on the ground (1) that the 
commission has made no “ order ” respecting peti¬ 
tioner’s claim, and consequently there is no basis 
for the suit, and (2) that the refusal of the commis¬ 
sion to authorize the refund, if it be deemed in any 
sense an order, relates to the payment of money only 
and is therefore not within our jurisdiction. The 
latter objection is disposed of by the decision just 
rendered in Southern Railway Co. et al. v. United 
States et al. (No. 44), and the reasons stated for the 
conclusion therein reached need not here be repeated. 


396 CASES BROUGHT IN THE COMMERCE COURT. 

It is only necessary to add that if this court has 
jurisdiction to set aside an order of the Commission 
which awards reparation, it has also jurisdiction to 
set aside an order which denies reparation. 

The form in which the Commission’s refusal was 
expressed in this instance is not shown by the record, 
nor does it seem to us at all important, since the peti¬ 
tion alleges and the answer of the Commission admits 
that leave to refund was denied without consideration 
of the merits of the claim, and solely because its 
allowance was prevented by the statutor}^ provision 
above quoted. While the sixth paragraph of the 
petition, and perhaps the prayer for relief, may be 
open to technical criticism, it appears plain to us that 
the pleadings taken together sufficiently define, and 
therefore require us to decide, the real matter in con¬ 
troversy between the parties, namely, whether the 
Commission was correct in its construction of the law 
in the Blinn case and in applying that construction 
to petitioner’s claim. 

What, then, is the true meaning of the so-called 
limitation? Did it deprive the Commission of author¬ 
ity to permit or require these carriers to repay the 
amount which they had collected in excess of a reason¬ 
able charge? If so, the Commission was right and 
the petition herein should be dismissed; if not, the 
order in question—for that which has all the effect of 
an order may be treated as an order—should be set 
aside to the end that the Commission may be free to 
consider petitioner’s claim upon its merits. 


CASES BROUGHT IN THE COMMERCE COURT. 397 

The contention of petitioner is easily compre¬ 
hended and may be summarized as follows: There 
must be some injury for which redress is afforded by 
“ the recovery of damages.” If an excessive rate is 
charged the injury occurs when payment of that rate 
is enforced, and the measure of recoverable damage is 
the excess of such payment above a reasonable rate. 
But until the shipper is compelled to pay the exces¬ 
sive amount no injury has been inflicted and conse¬ 
quently no “ complaint” can be made. Therefore, 
a “ cause of action” does not arise, because there is no 
damage, until the unreasonable rate has been actually 
collected. In this case the balance of the tariff rate, 
which was a concededly excessive rate, was paid in 
March, 1910, a little less than six months before the 
delivering carrier applied for leave to refund; and we 
regard the application then made, since it was so 
regarded by the Commission, as the equivalent of 
filing a complaint. 

We recognize the force of this contention, which is 
undoubtedly sustained by the common-law rule and 
numerous decisions in which that rule has been up¬ 
held. Indeed, it may be admitted that if this case 
is governed by the principle which obtains in the 
fields of contract litigation the ruling of the Commis¬ 
sion involved an error of law which the courts may be 
invoked to correct. 

But we are of opinion that the question here pre¬ 
sented is not controlled by the general rule, and that 
the Commission correctly construed the limiting 


398 CASES BROUGHT IN THE COMMERCE COURT. 

provision in the Blinn case and therefore properly 
rejected petitioner’s claim. This provision in the 
sixteenth section, inserted in 1906, is only an in¬ 
cidental and relatively unimportant part of a com¬ 
prehensive scheme of regulation which was in¬ 
augurated by the act of 1887 and has been expanded 
and strengthened by successive amendments. The 
pervading purpose of that scheme is the prevention of 
unjust discriminations and the enforcement of equal 
treatment as between all shippers in like situation. 
Clearly, the provision in question should be so con¬ 
strued as to advance that purpose if such a con¬ 
struction be in any view permissible. 

But if the construction contended for by petitioner 
is sustained it follows that judicial sanction would be 
given to certain preferences of obvious injustice and 
the aim of the law as a whole thereby measurably 
defeated. In other words, the limitation under 
review would be held to impair the beneficial pur¬ 
poses of the act by creating an obnoxious and inde¬ 
fensible exception to its requirements. This pro¬ 
vision, moreover, in common with other amendments 
adopted at the same time, was designed to make the 
law in its entirety more efficacious, and also de¬ 
signed to protect from depletion, after the lapse of 
two years, railway earnings resulting from the ap¬ 
plication of tariff charges. To hold that the ruling 
of the commission was erroneous would therefore not 
only legalize a device for offensive favoritism, but 
also to an extent subvert the special purpose for which 


CASES BROUGHT 11? THE COMMERCE COURT. 399 

this amendment was enacted. It is difficult to be¬ 
lieve that such a result was ever intended. 

In construing remedial statutes, especially those of 
a generic character, courts have not hesitated to 
restrict and modify the ordinary meaning of words 
and phrases, and even of entire paragraphs, in order 
to harmonize conflicting or inconsistent provisions 
and so enable all of them to contribute in proper 
degree to the object sought to be accomplished. 
Instances of this kind are too familiar to require 
citation. Indeed, the Supreme Court in the Abilene 
case (204 U. S., 426) declared that a right of action 
as old as the common law had been taken away by 
the act to regulate commerce, since otherwise full 
effect could not be given to the purpose of that 
statute to prevent discriminations. Bearing in mind 
how rarely suits were brought to recover damages for 
excessive railroad charges, and how easily collusive 
delay in the payment of freight bills could be util¬ 
ized, as the Commission points out, to give prefer¬ 
ences which are actual rebates, it seems well within 
precedent to reject petitioner’s contention and to 
uphold a construction under which, as Commissioner 
Lane observes, “ the act becomes workable and 
enforceable from the standpoint of shipper, carrier, 
and the Commission itself.” 

Any serious doubt in this case should disappear, 
as we think, when once it is clearly perceived that 
the relations between shipper and carrier are no 
longer contract relations; that the rights and obli¬ 
gations of both are fixed not by mutual agreement 


400 CASES BROUGHT IN THE COMMERCE COURT. 

but by the mandate of the statute; that the duty of 
the shipper to pay and of the carrier to collect the 
tariff rate in force when the transportation takes 
place, even though that rate be grossly excessive, is 
a duty imposed by legislative enactment; and that it 
is beyond the power of the parties to evade or modify 
this duty by any consent or understanding. In 
other words, since the obligation to pay the tariff 
charge springs from a positive law, the extension of 
credit because such charge is claimed or admitted to 
be unreasonable can not be granted by the carrier or 
accepted by the shipper. It follows that the reasons 
for the general rule above adverted to are altogether 
wanti g in the case here presented, and therefore 
the rule itself should be denied application. 

Moreover, when all the provisions of the act and 
supporting laws are taken together, and the doctrine 
of the Abilene case kept in mind, it becomes evident 
that the basis of a claim for reparation, which is the 
kind of “action” referred to in the limitation clause, 
is the existence at the time the claimant’s shipments 
moved of an unreasonable rate established by the 
carrier’s tariff and imposed upon all shippers alike; 
and that there can be no “recovery of damages” 
except as incident to a determination by the Commis¬ 
sion that such rate was unreasonable, including the 
extent to which it was unreasonable, and the fixing of 
a lawful rate for the future, unless the carrier has in 
the meantime voluntarily made the proper reduction. 
The real cause of action is the publication of a rate 
that is unlawful because excessive, and it “accrues” 


CASES BROUGHT IN THE COMMERCE COURT. 401 

as to a particular shipper when his property is trans¬ 
ported under that rate. As Commissioner Harlan 
says in his concurring report in the Blinn case: 

“The unlawfulness of the rate is the shipper’s 
cause of action, and the amount actually paid by him 
in excess of a lawful rate is but the measure of his 
damages. The wrong done to the shipper, w T ith re¬ 
spect to shipments already made, arises out of the 
publication by the carrier of an unlawful rate and the 
obligation imposed upon the shipper by the publi¬ 
cation to pay that rate. The bar of the statute 
therefore commences to run when the obligation of 
the shipper to pay the unlawful rate has become a 
completed obligation, namely, upon the delivery of 
the shipment to him at destination, and manifestly 
can not be postponed by the failure of the shipper to 
fulfill his obligation. It is true that there can be no 
recovery of damages unless the unlawful rate has been 
paid; nevertheless, the inquiry in any such pro¬ 
ceeding is whether the published rate was excessive, 
and, if so, to what extent. That is the issue, the cause 
of action, as w r ell as the subject matter of the contro¬ 
versy between the shipper and the carrier; and when 
resolved in favor of the shipper the extent of his 
damages on a particular shipment is a mere matter 
of calculation, wholly incidental to the controversy.” 

At common law one who had paid an excessive rate 
could ordinarily maintain a suit to recover the excess. 
His cause of action obviously arose when the damages 
were incurred; that is, when he was compelled to pay 

48250—S. Doc. 789, 62-2-26 


402 CASES BROUGHT IN THE COMMERCE COURT. 

that rate. Prior to such payment he had no common- 
law remedy because he had suffered no injury. The 
contract obligation to pay the excessive charge did 
not damage him, because that obligation was unen¬ 
forceable as to the excess above a reasonable charge. 

But such an action can no longer be maintained, 
as the Supreme Court decided in the Abilene case, 
supra. The present obligation is statutor}^ and not 
contractual. The shipper is now bound to pay the 
full tariff rate, even though it be unreasonable, and 
is therefore deprived of his former defense, if suit be 
brought to enforce payment of the tariff rate, unless 
the statute makes provision for his relief. It follows 
from this change in the law that, whether he actually 
pays the tariff rate or only incurs the obligation to do 
so, he can neither sue for damages in the one case nor 
on the other defend a suit for the tariff charge, unless 
the Commission shall have found that such tariff rate 
was unreasonable, and the extent to which it was 
unreasonable, when his property was transported. 

The regulating statute gives the shipper a right to 
reparation, that is, a right to complain to the Com¬ 
mission and, if the facts justify, obtain its findings 
and order accordingly. The order in such case is not 
the real basis of his suit or defense at law, but rather 
a condition precedent thereto. In other words, the 
shipper may complain of a tariff rate not only to 
secure its reduction for the future, but also, if his 
traffic has moved under that rate, to have the Com¬ 
mission determine what would have been a reasonable 
rate thereon; and, as respects the authority of the 


CASES BROUGHT IN THE COMMERCE COURT. 403 

Commission, it would not matter whether the rate 
had been paid or partly paid or remained wholly un¬ 
paid. If paid, the report and findings of the Commis¬ 
sion would fix the portion he was entitled to have 
refunded; if not paid, his statutory obligation would 
be ascertained. 

The nature of the order awarding damages in con¬ 
nection with the reduction of the rate might therefore 
vary according to the situation at the time the Com¬ 
mission made its report. If payment had been made 
the order would require the carrier to refund the ex¬ 
cessive amount, and the shipper could then sue at 
law for his damages, offering the order as prima facie 
proof of his case. If payment had not been made the 
only reparation that the shipper could secure would 
be the finding of the Commission that the tariff rate 
was unreasonable, to such a degree as might be de¬ 
termined; and, for aught we can see, the Commission 
in such case could make an order which would be 
available to the shipper as prima facie proof of his 
defense to the carrier’s suit. 

The cause of action before the Commission, how¬ 
ever, is the same in either case, viz, to secure a reduc¬ 
tion of the tariff rate and a finding as to the damages 
resulting from its exaction, whether in cash or in the 
obligation, otherwise binding, to pay the unreasonable 
tariff rate; and this cause of action accrues, in our 
judgment, not when the exaction is enforced, but 
when the obligation is incurred—that is, when the 
service is performed. Its nature remains unchanged 
by reason of subsequent payment, if payment was not 


404 CASES BROUGHT IN THE COMMERCE COURT. 

made at the time, since such postponed payment 
affects only the form and not the substance of the 
Commission’s order. 

To interpret the statute as denying relief to a 
shipper who has not yet paid an unreasonable charge, 
although the carrier admits his complaint of unreason¬ 
ableness and offers to remit the excess if the Commis¬ 
sion will give its permission, would require him to go 
through the meaningless form of paying a sum of 
money to which the carrier is not entitled and which 
the Commission would immediately require the car¬ 
rier to refund. Nevertheless, such permission must 
be obtained, because otherwise the refund would be 
unlawful on the part of both shipper and carrier. 
While the statute in terms provides that the Com¬ 
mission may order the carrier to pay damages, we 
do not feel required to interpret the word “pay” in 
the narrow sense of a money transaction. It is equally 
a payment, within the contemplation of this provision, 
to be relieved from an obligation which the law im¬ 
poses; and an order to remit the excess above a reason¬ 
able charge, which the Commission has fixed, is in 
substance and effect an order for the “recovery of 
damages” within the meaning of the clause in 
question. 

The purposes of the act as a scheme of regulation 
and the language of the provision in question indicate 
clearly that this is a limitation which operates without 
the aid of pleading. So far from being a defense 
which the carrier may or may not interpose, it is in 
effect a restriction upon the authority of the Commis- 


CASES BROUGHT IN THE COMMERCE COURT. 405 

sion itself, since its plain intent is to deprive that 
body of jurisdiction to allow reparation after the lapse 
of two years. A similar provision relating to claims 
against the United States reads as follows: 

“ That every claim against the United States, cog¬ 
nizable by the Court of Claims, shall be forever barred, 
unless the petition setting forth a statement of the 
claim be filed in the court or transmitted to it under 
the provisions of this act within six years after the 
claim first accrues.” 

Construing this provision the Supreme Court held 
that it could not be waived and need not be pleaded. 
{Finn v. United States, 123 U. S., 232, 233.) 

The conclusion we have reached in this case is sup¬ 
ported, in some measure at least, by a further consid¬ 
eration. The ruling of the Commission in the Blinn 
case is more than the decision of a particular contro¬ 
versy; it is also the administrative construction of 
the law by the tribunal charged with its enforcement. 
It is now nearly tw^o and a half years since this ruling 
was promulgated. During that time it has been 
applied in numerous instances and come to be widely 
known and generally accepted. Under such circum¬ 
stances the ruling should not be set aside, except for 
the most convincing reasons, and such reasons have 
not, in our judgment, been made to appear in this 
case. {New Haven R. R. v. Interstate Com. Com^n, 
200 U. S., 401.) 

Believing that the Commission was right in reject¬ 
ing petitioner’s claim, and agreeing substantially with 


406 CASES BROUGHT IN THE COMMERCE COURT. 

the views expressed by Commissioners Lane and 
Harlan in the Blinn case, we see no occasion for more 
• extended discussion. It follows that the petition 
herein should be dismissed with costs , and it will be so 
ordered. 

Archbald, Judge, concurring: 

I agree that the petition should be dismissed, but 
not on the ground that the proceedings before the 
Commission were not in time, on which I do not 
undertake to pass. The Government has moved to 
dismiss for the reason that as the case stands there 
is no order of the Commission to be reached; and 
that all, in effect, that we are asked to do is to give 
a construction to the statute different from that 
expressed by the Commission, which, aside from an 
actual adjudication, it is not our province to do. 
This motion, if well taken, can not be disregarded, 
and in my judgment it clearly is. 

The petitioner was not a complainant before the 
Commission. The proceedings there were instituted 
by the carrier and consisted of a petition asking 
leave to make reparation for an excessive freight 
charge which had been admittedly exacted on a 
single shipment some time before. The Commission 
refused to entertain the petition on the ground that 
according to its previous ruling in Blinn Lumber Co. 
v. Southern Pacific R. R. (18 Inter. Com. Rep., 434) 
it was too late, more than two years having elapsed 
since the goods were shipped and the excessive 
charge made, although it was within two years of 


CASES BROUGHT IN THE COMMERCE COURT. 407 

the time when the rate was paid. The present peti¬ 
tion is by the shipper, and, after setting forth the 
facts, complains that the construction so placed by 
the Commission on section 16 of the interstate com¬ 
merce act, that a cause of action on a claim for repa¬ 
ration accrues within the meaning of the law on the 
date when the freight is shipped, and is barred 
unless complaint is made to the Commission within 
two years from that time, is erroneous, and should 
be set aside and held for naught by this court. 
The prayer is that “the petition be heard and 
granted,” and that the petitioner “ be permitted to 
file its claim for reparation with the Commission 
and have all other and proper relief.” 

The case has been submitted on briefs, counsel for 
the petitioner not being able to be present. The 
question involved is an important and difficult one, 
and, for a correct solution, needs all the light possible 
by way of oral argument, and we lack that valuable 
aid. No merely advisory opinion is to be indulged 
in, and that, having regard to the record, is all, as it 
seems to me, that would result here. As already 
stated, the shipper made no complaint to the Com¬ 
mission. The carrier simply asked leave to redress 
what it had done, by repaying the excess charge. It 
may be that this practice is sanctioned by the 
statute, but it can not be made to take the place of 
that which is required of the shipper before he has 
ground for coming here. Where the shipper has a 
grievance he is to apply to the Commission (sec. 13), 
setting forth his cause of complaint, the carrier being 


408 CASES BROUGHT IX THE COMMERCE COURT. 

called on to satisfy it or show cause why it should not. 
And if the Commission, after a hearing (sec. 16), 
decides that the shipper is entitled to damages, an 
order is to be made on the carrier to pay by a day 
certain, which the shipper, on failure of the carrier to 
comply, may enforce by proceedings against it in 
court. It is with regard to complaints of this 
character that it is provided that they shall be filed 
with the Commission “ within two years from the 
time the cause of action accrues and not after the 
meaning of which is the subject of controversy here. 

The essence of the proceedings which are thus pro¬ 
vided for by the statute is to be maintained, and 
this calls for a complaint by the shipper as the funda¬ 
mental thing. A petition by the carrier for leave to 
make good to the shipper that which is the subject 
of complaint is not a substitute therefor. The closer 
the statute is adhered to the less chance is there to 
go astray. The difficulty is that neither the issue 
nor the outcome in the two proceedings is the same. 
The one is adversary, however the carrier may come 
in and admit it, and looks to an order which the 
carrier is required and may be compelled to obey; 
the other merely seeks permission to make redress, 
which, being sanctioned, if at all, by reason of the 
general supervision of the Commission over the 
affairs of interstate carriers, is more or less a matter 
of discretion, and upon being refused leaves the 
parties practically as they were before. Where the 
shipper complains and an order in his favor is made 
he has something on which he can proceed. Or, if 


CASES BROUGHT IN THE COMMERCE COURT. 409 

it is refused; under our ruling in the Proctor & Gamble 
case (188 Fed., 221), upon a proper showing he would 
have ground for relief here. But where on applica¬ 
tion of the carrier the right to make reparation is 
denied, there is no order adverse to the shipper, in 
contemplation of law, however much it may stand 
in the way of his getting his money in practical effect, 
the carrier without the approval of the Commission 
not caring to take the risk. 

It can not be said, in other words, that, by the 
refusal of the petition of the carrier, the shipper is 
denied a right which he is entitled to maintain. It is 
still open to him to make his complaint to the Com¬ 
mission and get a ruling thereon. And it is only the 
attitude already taken by that body, or, as it is 
charged in the petition, the construction put by it on 
the statute, which stands in the way. But complaint 
might just as well be made of the ruling in the Blinn 
lumber case, on which the Commission relies, that 
being where the trouble begins. The right to file a 
claim for reparation with the Commission, which is 
prayed for, is thus, in fact, in the petitioner’s own 
hands. There are other considerations which are 
opposed to a petition by the carrier being taken as the 
equivalent of a complaint by the shipper, as for in¬ 
stance, if the shipper is not content with the repara¬ 
tion proposed, a situation with which on any such 
basis it would be awkward to deal. It is difficult to 
see also, how, if the carrier is willing to make repara-; 
tion and the Commission is satisfied that there is no 
collusion, the matter of time should stand in the way. 


410 CASES BROUGHT IN THE COMMERCE COURT. 


But without enlarging further, it seems to me, that 
only by the most extreme construction can the re¬ 
jection of the carrier’s petition be regarded as an order 
of the Commission, over which we have jurisdiction, 
and with respect to which at the instance of the ship¬ 
per we can grant relief and particularly the relief 
here asked; and that the motion to dismiss should be 
granted for this reason, but not for the reason that the 
petition presented by the carrier to the Commission 
was not in time. 

Garland, Judge , dissenting: 

I am unable to concur in the result reached by the 
majority. Section 16 of the act to regulate com¬ 
merce provides: 

‘‘That if, after hearing on a complaint made as 
provided in section thirteen of this act, the Commis¬ 
sion shall determine that any party complainant is 
entitled to an award of damages under the provisions 
of this act for a violation thereof, the Commission 
shall make an order directing the carrier to pay to 
the complainant the sum to which he is entitled on 
or before a day named. * * * All complaints for 
the recovery of damages shall be filed with the Com¬ 
mission within two years from the time the cause of 
action accrues. * * *” 

By the very language of the statute itself, the two- 
year limitation only applies to complaints for the 
recovery of damages; therefore, it can not be claimed 
that Congress intended to fix any limitation as to 
complaints where no damages were claimed. It is 


CASES BROUGHT IN THE COMMERCE COURT. 411 

true that section 13 of the act provides that no com¬ 
plaint shall be dismissed because of the absence of 
direct damage to the complainant, but this last pro¬ 
vision has no application to complaints which have 
for their only object the recovery of damages; other¬ 
wise, such a complaint could not be dismissed even 
if no damage was shown to the complainant. There 
are other complaints provided for in section 13 to 
which this provision would be applicable. The limi¬ 
tation of two years being restricted to complaints 
for the recovery of damages, it necessarily results that 
a complaint which does not claim damages is not 
within the limitation. 

The words “cause of action,” mentioned in the 
statute, must not be confounded with the proceeding 
to establish such cause of action before the Interstate 
Commerce Commission. The cause of action must 
exist before the proceeding can be had. In other 
words, the cause of action must not be confounded 
with the remedy. The cause of action which exists 
in favor of a shipper for an unreasonable and unjust 
charge for the transportation of freight is the cause 
of action which the shipper has against the carrier; 
and if he has paid no unjust charge he has no cause of 
action against the carrier, and therefore he has no 
right to file a complaint before the Commission for 
the recovery of damages, as he has suffered no dam¬ 
age. The shipper’s right of action in the case at bar 
accrued whenever the event happened which enabled 
it to file a complaint with the Commission showing on 
its face that it had suffered damage, and the shipper 


412 CASES BROUGHT IN THE COMMERCE COURT. 

could not, until it had been injured by the payment of 
the excessive charge, claim damages. 

The attempt to sustain the result reached in this 
case by claiming that the obligation of the shipper to 
pay reasonable and just rates is now statutory and 
not contractual is not convincing, first, because the 
obligation to pay reasonable and just rates is no less 
contractual now than it was before the act to regulate 
commerce. The statute provides that all charges 
made for any service rendered or to be rendered in the 
transportation of passengers or property or in con¬ 
nection therewith shall be just and reasonable. So 
did the common law. The implied obligation to pay 
such charges arises from the delivery of the property 
of the shipper to the carrier to be transported and is 
as much a matter of contract now as ever; and, 
second, conceding for the sake of argument that the 
obligation to pay is statutory, this fact is in no way 
determinative as to when a shipper is damaged. 

In the absence of a declared intention to the con¬ 
trary, we must presume that Congress used the words 
“cause of action accrues” in the sense that, it is ad¬ 
mitted, they are understood by the legal profession 
in similar cases. If Congress desires that the period 
of two years’ limitation shall commence to run from 
the time the freight moves, it can easily amend the 
law. It is our duty to declare the law, not to make it. 

The fundamental error, it seems to me, in the rul¬ 
ing of the Commission, arises, first, by confounding 
the remedy or proceeding of the shipper before the 
Commission with the cause of action which the ship- 


CASES BROUGHT IN THE COMMERCE COURT. 413 


per has against the carrier; and, second, by attempt¬ 
ing to put a construction upon the statute of limita¬ 
tions that will carry out the desire and purpose of the 
Commission in the performance of its administrative 
duties. It is urged that to leave it to the carrier and 
shipper to determine when the payment of the exces¬ 
sive freight rate shall be made permits the carrier and 
shipper to wait until all other shippers have paid 
their charges and then take up the matter of repara¬ 
tion with the particular shipper who has been given 
a long credit, and thus to bring about a preference .or 
discrimination, and perhaps a form of rebate. But 
even if this is so, a fear on the part of the Commission 
that discriminations and rebates may result from a 
construction of the statute different from the one 
established in the Blinn case is no reason for giving 
a meaning to the statute at variance with all prece¬ 
dent. The Commission at one time decided, con¬ 
trary to its former rulings, that it was illegal for a car¬ 
rier to pay the actual cost of elevating grain at a 
transfer point, and one of the grounds of this decision 
was the fear on the part of the Commission that this 
payment would open the door for the payment of 
rebates and undue discriminations; but the courts 
seem to have held that the fear that some illegal 
practice might result was no reason for condemning 
a practice otherwise honest and lawful. (Interstate 
Commerce Commission, appellant, v. F. H. Peavey & 
Co., et al,, decided by the Supreme Court Nov. 13, 
1911.) 


414 CASES BROUGHT IN THE COMMERCE COURT. 

I ani of the opinion that the attempt to apply the 
law as stated in T. & P. Ry. Co. v. Abeline Cotton 
Oil Co. (204 U. S., 426) is beside the question, as 
in the case at bar it is simply a question of the proper 
construction of an ordinary statute of limitations in 
which the construction of no other portion of the 
law seems to be involved. Nor am I persuaded that 
the doctrine of the Blinn case, enunciated by the 
Commission in May, 1910, contrary to all their pre¬ 
vious rulings and subject to a dissent of two of the 
members of the Commission, establishes any construc¬ 
tion of the statute so long continued as to be of any 
weight in deciding the present case. I am of the 
opinion that the Commission could raise the ques¬ 
tion of the statute of limitations itself, and also that 
under the pleadings as they stand in this case the 
question whether there was a formal order is fore¬ 
closed. I am further of the opinion that the fertil¬ 
izer company, being the real party in interest, may, 
under well-recognized principles of equity jurisdic¬ 
tion, maintain the petition in this case, although it 
filed no complaint with the Commission. ( Inter¬ 
state Commerce Commission v. Diffenbaugh , United 
States Supreme Court, Nov. 13,1911; 176 Fed., 409.) 

The order of the Commission should be vacated 
and the case heard by it on its merits. 

I am authorized to say that Judge Hunt concurs 
in this dissent. 


United States Commerce Court. 


No. 44. —October Session, 1911. 


Southern Railway Company, et al., petitioners, 

v. 

United States of America, respondent. 
Interstate Commerce Commission, intervening 

RESPONDENT. 


ON MOTION TO DISMISS FOR WANT OE JURISDICTION. 

Mr. R. Walton Moore, Mr. M err el P. Callaway, 
Mr. Charles J. Rixey, jr., Mr. Alfred P. Thom , Mr. 
Henry T. Wickham, and Mr. W. S. Bronson for 
the petitioners. 

Mr. Blackburn Esterline, special assistant to the 
Attorney General, with whom Mr. James A. Fow¬ 
ler, Assistant to the Attorney General, was on the 
brief, for the United States. 

Mr. P. J. Farrell, for the Interstate Commerce 
Commisson. 

Before Knapp, Presiding Judge, and Archbald, 
Hunt, Carland, and Mack, Judges. 

[Dec. 5, 1911.] 

Hunt, Judge: 

The only question now before us pertains to the 
jurisdiction of the Commerce Court. 

The petition was filed by the Southern Railway 
Company and the Chesapeake and Ohio Railway 

415 





416 CASES BROUGHT IN THE COMMERCE COURT. 

Company, asking in effect that two certain orders 
of reparation ‘in favor of the St. Louis Blast Fur¬ 
nace Company made by the Interstate Commerce 
Commission be annulled and that pending suit the 
enforcement of each of gaid orders be enjoined. 

The Commission intervened in this court and 
joins with the United States in a motion to dismiss 
the petition because each of the orders made by the 
Commission and referred to in the petition is an 
order for the payment of money only, and the Com¬ 
merce Court has no jurisdiction over the subject 
matter. 

By the terms of the act to create a Commerce 
Court (approved June 18,1910) exclusive jurisdic¬ 
tion of these several kinds of cases, among others, 
was conferred upon it: 

“ First. x411 cases for the enforcement, otherwise 
than by adjudication and collection of a forfeiture 
or penalty or by infliction of criminal punishment, 
of any order of the Interstate Commerce Commis¬ 
sion other than for the payment of money. 

“ Second. Cases brought to enjoin, set aside, an¬ 
nul, or suspend, in whole or in part, any order of 
the Interstate Commerce Commission. ’ ’ 

There was express denial of enlargement of the 
jurisdiction of the circuit courts as such jurisdic¬ 
tion was vested when the act to create the Com¬ 
merce Court was passed. The act merely though 
precisely transferred to and vested in the Com¬ 
merce Court exclusively whatsoever power the cir¬ 
cuit courts had theretofore possessed to hear and 


CASES BROUGHT IN THE COMMERCE COURT. 417 

determine the kinds of cases or proceedings enu¬ 
merated. We have so held in The Procter and 
Gamble Company v. United States (188 Fed., 221). 

In the grant of jurisdiction to the Commerce 
Court, exclusive yet full though it is in the classes 
of cases discussed, there is an express provision 
that nothing in the act shall affect the jurisdiction 
possessed by any circuit or district court of the 
United States over cases or proceedings of a kind 
not within the classes enumerated in the para¬ 
graphs of section 1 heretofore referred to. Bear¬ 
ing in mind the language of the exception of all 
cases for the enforcement of orders for the pay¬ 
ment of money, it at once becomes apparent that 
actions at law where right of jury trial is pre¬ 
served can not be tried in this court. However, as 
to such actions, the statute is not silent, for the 
language of that clause of section 1 of the act cre¬ 
ating this court, whereby it is affirmatively pro¬ 
vided that the act shall not affect the jurisdiction 
possessed by any circuit or district court of the 
United States over cases or proceedings of a kind 
not within the classes enumerated in the act estab¬ 
lishing the Commerce Court, clearly comprehends 
them and preserves the rights of parties as they 
existed before June 18, 1910. Such a construction 
of the act makes each part effective by cutting out 
from the jurisdiction of the circuit courts and 
transferring to this court exclusive jurisdiction 
over various kinds of cases, yet reserving the juris¬ 
diction in those courts as it was possessed over 


418 CASES BROUGHT IN THE COMMERCE COURT. 

cases which but for the exception would have been 
included in the general clause. 

The language which defines an order which may 
be affected by decree of this court is unrestricted; 
“ any order ” which is involved in a direct suit to 
enjoin, set aside, annul, or suspend, provided al¬ 
ways it is a case where a circuit court formerly 
possessed jurisdiction to annul, set aside, or sus¬ 
pend. And that prior to June 18, 1910, the circuit 
courts had jurisdiction is evident, for the language 
of section 16 of the Hepburn Act of June 29, 1906, 
expressly vested in such courts power to hear and 
determine suits *to enjoin, set aside, annul, or sus¬ 
pend any order of the Commission. We can not 
read into the clause which confers jurisdiction 
upon this court words of limitation other than 
those which formerly circumscribed the powers of 
the circuit courts, nor can we except from the 
described kinds of cases where injunction, annul¬ 
ment, or suspension may be had orders for the pay¬ 
ment of money. The fundamental principle that 
Congress is presumed to have expressed its mean¬ 
ing with due deliberation, and that it is not within 
the power of the court to go beyond the plain ex¬ 
pressions of the legislature, prevents the court from 
holding otherwise. 

We need go no further now than to hold that 
since the approval of the act creating this court, 
a carrier which is ordered to pay damages, and 
which could have gone to the circuit court in equity 
to have such an order annulled or enjoined, has 
now the right to ask this court to enjoin or annul 


CASES BROUGHT IN THE COMMERCE COURT. 419 

or suspend such an order, provided always it can 
show grounds for equitable relief. And as the ju¬ 
risdiction of this court over such a case is exclusive, 
it follows that no other court can entertain a bill in 
equity for the direct purposes of annulment or sus¬ 
pension as aforesaid. 

We are urged to adopt the view that when Con¬ 
gress excepted from the kinds of cases over which 
the Commerce Court may exercise jurisdiction the 
enforcement of an order for the payment of money, 
it could not have intended to authorize us to annul 
such an order, it being said that when the circuit 
court tries an action at law to enforce such an 
order, that court necessarily has power to deny 
relief, on the ground that the order is illegal and 
void, and that therefore there is a destruction of 
that clause of the act which makes the jurisdic¬ 
tion of this court exclusive over cases to annul 
any order of the Commission. The difficulty 
with this reasoning lies in confounding these two 
propositions: On the one hand, an express affirma¬ 
tive denial of power to this court to try an action 
sounding in tort as does one to recover damage for 
excesses of rates collected as ordered by the Com¬ 
mission, wherein right of trial by jury must be pre¬ 
served; and on the other hand, an express grant 
to this court of exclusive authority to hear and 
decide a petition brought to annul or enjoin an 
order of the Commission. No suit having for its 
purpose the annulling of an order for the payment 
of money is brought in the circuit court, and none 


420 CASES BROUGHT IN THE COMMERCE COURT. 

can be, the jurisdiction of this court being exclusive 
in actions of that kind. The case in the circuit 
court is one to recover damages upon an order duly 
made by the Commission. True, a defense, among 
others available, may involve the validity of the 
order upon which plaintiff bases his action, but we 
need not dwell upon what questions may be pre¬ 
sented in the circuit court, for we have no jurisdic¬ 
tion over them. It is plain, however, that if such 
a defense is sustained in the circuit court, the ruling 
does not thereby affirmatively annul and set aside 
the order of the Commission; it merely determines 
that as between the parties before it the order is 
not a valid legal basis for the particular claim 
sought to be enforced. In actual practice, where 
law and equity courts are invoked, there may arise 
some opportunity for varying views upon the valid¬ 
ity of an order of the Commission. Surely, though, 
instances of divergent views will not happen more 
often than they do under any system where sepa¬ 
ration of law and equity obtains, and in any event 
are not of such serious apprehension as to justify 
a construction of the statute which would subtract 
from the lawful authority deliberately conferred 
by Congress upon this court exclusively to enjoin, 
set aside, annul, or suspend, in whole or in part, 
“ any order ” of the Commission. 

As what we have said is controlling upon juris¬ 
diction, the only question now presented, the motion 
to dismiss, must be denied . 

So ordered . 


United States Commerce Court. 


October Session, 1911. 


The Nashville Grain Exchange and 
The Nashville Board of Trade, peti¬ 
tioners, 

v. 

United States of America, respondent, 
and Interstate Commerce Commis¬ 
sion, intervener. 


No. 46. 


Louisville & Nashville Railroad Com- 
pany and Nashville, Chattanooga and 
St. Louis Railway, petitioners, 

v . 

United States of America, respondent, 
and Interstate Commerce Commis¬ 
sion and W. S. Duncan & Company 
et al., interveners. 


ON MOTION FOR TEMPORARY INJUNCTION ON THE PART 
OF PETITIONERS, AND ON MOTIONS TO DISMISS BY RE¬ 
SPONDENT AND INTERVENERS. 

Mr. K. T. McConnico, with whom Mr. Lee Douglas 
was on the brief, Mr. E. Walton Moore , and Mr. 
Albert S. Brandeis , for the petitioners. 


421 







422 CASES BROUGHT IN THE COMMERCE COURT. 

Mr. Blackburn Esterline, special assistant to the 
Attorney General, with whom Mr. James A. Fowler, 
assistant to the Attorney General, was on the brief, 
for the United States. 

Mr. Charles W. Needham for the Interstate Com¬ 
merce Commission. 

Mr. William A. Wimbish for the intervening 
shippers. 

Before Knapp, Presiding Judge, and Archbald, 
Hunt, Carland, and Mack, Judges. 

[October 24,1911.] 

Carland, Judge: 

The above cases are before the court on motion 
of the petitioners in each case for a temporary in¬ 
junction, and on the joint motion of the United 
States and the Interstate Commerce Commission 
to dismiss the petition in case No. 46, and on mo¬ 
tion of W. S. Duncan and Company et al. to dis¬ 
miss the petition in case No. 47. 

The joint motion of the United States and the 
Interstate Commerce Commission to dismiss the 
petition in case No. 46 is based upon the alleged 
want of capacity in the petitioners therein to main¬ 
tain an original petition in this court for the pur¬ 
pose of setting aside the order of the Interstate 
Commerce Commission of which complaint is 
made. As counsel for petitioners in case No. 46 
have requested that if in the opinion of the court 
there should be doubt as to the right of said peti¬ 
tioners to maintain said petition, then that said 


CASES BROUGHT IN THE COMMERCE COURT. 423 

petitioners be granted leave to have said petition 
treated as a petition in intervention in support of 
the petition filed in case No. 47, we do not deem it 
necessary to pass upon the motion to dismiss, but 
under and by virtue of the power conferred upon 
courts of the United States by section 921, R. S'. 
U. S., will consolidate said cases Nos. 46 and 47 
and order that the petition in case No. 46 stand 
as a complaint in intervention in support of the 
petition filed in case No. 47. 

It is insisted, however, by counsel for the United 
States and the Interstate Commerce Commission 
that the petitioners in case No. 46 have no such 
interest in the controversy as entitles them to in¬ 
tervene in case No. 47. We think this contention 
can not be sustained. The last proviso of section 
5 of the act creating this court provides as follows: 

“Provided further, That communities, associa¬ 
tions, corporations, firms, and individuals who are 
interested in the controversy or question before 
the Interstate Commerce Commission, or in any 
suit which may be brought by any one under the 
terms of this act or the acts of which it is amenda¬ 
tory or which are amendatory of it, relating to 
action of the Interstate Commerce Commission, 
may intervene in said suit or proceedings at any 
time after the institution thereof.” 

The Nashville Grain Exchange is a corporation 
organized under the laws of Tennessee, and is an 
association of the grain dealers of the city of Nash- 


424 CASES BROUGHT IN THE COMMERCE COURT. 

ville in said State, including in its membership 
practically all of the dealers in grain, grain prod¬ 
ucts, and hay in said city. The Nashville Board 
of Trade is a corporation organized under the laws 
of Tennessee, and is the leading commercial or¬ 
ganization of the city of Nashville, representing in 
an organized way the bulk of the substantial busi¬ 
ness interests of said city. 

Language could not very well be made broader 
than the terms of the statute. It not only permits 
communities, associations, corporations, firms, and 
individuals who are interested in the controversy 
to intervene, but such communities, associations, 
corporations, firms, and individuals, if interested in 
the question before the commission or in any suit 
which may be brought by anyone under the provi¬ 
sions of the act creating this court, may intervene 
in any suit or proceeding at any time after the 
institution thereof. While there may be room for 
argument as to the character of the interest which 
such communities, associations, corporations, firms, 
and individuals should have in the controversy in 
any suit in this court, there certainly can be no 
question but that the petitioners in case No. 46 
are interested in the question to be decided in case 
No. 47. It has sometimes been held that parties 
who were merely interested in the question to be 
decided in a lawsuit were not interested within the 
terms of a statute which provided that parties in 
interest might intervene, but Congress in the lan- 


CASES BROUGHT IN THE COMMERCE COURT. 425 

guage of the law above quoted was careful to make 
the law broad enough to include not only those 
vvho might be directly interested in the controversy, 
but those who were interested in the question to be 
decided. 

The mandatory part of the order of the Inter¬ 
state Commerce Commission sought to be annulled 
in these proceedings is as follows: 

“It is ordered, That the above-named defend¬ 
ants be, and they severally are hereby, notified and 
required to cease and desist, on or before the 1st 
day of August, 1911 (postponed by the commission 
to November 1st, 1911), and for a period of at least 
two years thereafter abstain from granting to 
Nashville and to the dealers in grain, grain prod¬ 
ucts, and hay located at Nashville, the privilege of 
so rebilling or reshipping said products from Nash¬ 
ville so long as said defendants refuse and refrain 
from granting the said privilege of rebilling or re¬ 
shipping grain, grain products, and hay to Atlanta, 
Columbus, Macon, Cordele, Albany, Valdosta, Dub¬ 
lin, Montezuma, Rome, and Athens, or either of 
them, and to the dealers in said commodities lo¬ 
cated at said cities.” 

It is shown by the petitions and affidavits in 
these cases that the enforcement of this order will 
result in the destruction of the existing business 
of grain dealers at Nashville, and said grain deal¬ 
ers are members of the Nashville Grain Exchange 
and the Nashville Board of Trade. 


426 CASES BROUGHT IN THE COMMERCE COURT. 

So far as the motion for the temporary injunction 
is concerned, we are of opinion that the same should 
be granted in case No. 47. Section 3 of the act 
creating this court provides as follows: 

“ That suits to enjoin, set aside, annul, or sus¬ 
pend any order of the Interstate Commerce Com¬ 
mission shall be brought in the Commerce Court 
against the United States. The pendency of such 
suit shall not of itself stay or suspend the opera¬ 
tion of the order of the Interstate Commerce Com¬ 
mission ; but the Commerce Court, in its discretion, 
may restrain or suspend, in whole or in part, the 
operation of the commission’s order, pending the 
final hearing and determination of the suit.” 

The word “ discretion ” used in the law of course 
means a legal discretion, a discretion controlled 
and limited by sound principles of law applied to 
the facts in each particular case. The principles 
which govern courts of equity in granting tem¬ 
porary injunctions are well known to the profes¬ 
sion and need not be stated here. One of those 
principles, however, may be stated as follows: 
Where the case in which the temporary writ of 
injunction is asked presents questions of grave 
importance and difficulty, and it appears from the 
pleadings and affidavits presented upon the hear¬ 
ing for the temporary writ that great damage will 
result to the complainant if the writ is not granted 
and he shall finally be successful in the litigation, 


CASES BROUGHT IN THE COMMERCE COURT. 427 

and on the other hand that the granting of the writ 
will not cause serious damage to the defendant as 
compared with the damage which would result to 
the complainant if the same were not granted, a 
court of equity will unhesitatingly, in order to 
maintain the present status, issue a temporary writ 
of injunction. 

In this case the pleadings and affidavits satisfy 
the court that the petitioners will be greatly dam¬ 
aged if the temporary writ is not granted and they 
shall finally be successful in the litigation. On the 
other hand, we are satisfied that, in comparison 
with the damage which would thus be suffered by 
the petitioners, the damage which will result to the 
respondent and interveners if the temporary writ 
is granted and they shall be successful in the litiga¬ 
tion will be small. We fully appreciate the grave 
and responsible duty imposed upon this court by 
law in reference to the granting of injunctions re¬ 
straining or suspending the orders of the Inter¬ 
state Commerce Commission, and such cases will 
always be approached and considered with the 
care and consideration which such duty imposes. 
In view of the principles which should guide all 
courts of equity in granting temporary writs of 
injunction, and in view of the great responsibility 
above mentioned, we think the pleadings and affi¬ 
davits presented to us on this hearing present a 
clear case for the granting of an order suspending 


428 CASES BROUGHT IN THE COMMERCE COURT. 

the enforcement of the order complained of until 
the further order of the court. 

In regard to the motion to dismiss made by W. S. 
Duncan and Company et al., in case No. 47, it ap¬ 
pears that the motion strikes at the foundation of 
the case. A consideration thereof will be deferred, 
therefore, until the case is heard upon the merits. 


United States Commerce Court. 


No. 47.— April Session, 1912. 


Louisville & Nashville Railroad Company, 
Nashville, Chattanooga & St. Louis Railway, peti¬ 
tioners; Nashville Grain Exchange, Nashville Board 
of Trade, intervening petitioners; 

v. 

United States of America, Respondent; Inter- 
state Commerce Commission, W. S. Duncan & 
Company, et al., intervening respondents. 


For opinion of the Interstate Commerce Commis¬ 
sion, see 21 I. C. C. Rep., 186. See also 16 I. C. C. 
Rep., 590, 18th I. C. C. Rep., 280. 

Mr. R. Walton Moore , with whom Mr. M. P. Callo¬ 
way and Mr. C. J. Rixey , jr ., were on the brief, for 
the Nashville, Chattanooga & St. Louis Railway, and 
Mr. Albert S. Brandeis, with whom Mr. William G. 
Bearing was on the brief, for the Louisville & Nash¬ 
ville Railroad Company, petitioner. 

Mr. K. T. McConnico, with whom Mr. Lee Douglas 
and Mr. John A. Pitts were on the brief, for the in¬ 
tervening petitioners. 

Mr. Blackburn Esterline , special assistant to the 

Attorney General, with whom Mr. Winfred T. Deni- 

429 





430 CASES BROUGHT IN THE COMMERCE COURT. 

son, Assistant Attorney General, was on the brief, 
for the United States. 

Mr. Charles W. Needham for the Interstate Com¬ 
merce Commission. 

Mr. William A. Wimbish for the other intervening 
respondents. 

ON FINAL HEARING. 

Before Knapp, Presiding Judge, and Archbald, 
Hunt, Carland, and Mack, Judges. 

[June 7, 1912.] 

Carland, Judge: 

This proceeding was instituted for the purpose of 
obtaining a judgment annulling an order of the Inter¬ 
state Commerce Commission made on June 9, 1911, 
requiring the Louisville & Nashville Railroad Com¬ 
pany, hereafter called the L. & N., and the Nashville, 
Chattanooga & St. Louis Railway Company, hereafter 
called the N. C. & St. L., to cease and desist for a 
period of two years from and after August 1, 1911, 
from granting to Nashville, Tenn., and to dealers in 
grain, grain products, and hay located at Nashville, 
the privilege of rebilling or reshipping grain, grain 
products, and hay from Nashville, so long as said 
railroads * should refuse and refrain from granting 
said privilege of rebilling or reshipping grain, grain 
products, and hay to Atlanta, Columbus, Macon, 
Cordele, Albany, Valdosta, Dublin, Montezuma, 
Rome, and Athens, Ga., or either of them, and to the 
dealers in said commodities located in said cities. 

The L. & N. owns and operates a line of railroad 
from Louisville, on the Ohio River, in Kentucky, to 


CASES BROUGHT IN THE COMMERCE COURT. 431 

Nashville, Tenn., on the Cumberland River, and 
from Nashville to Birmingham and Montgomery. Its 
rails do not reach Columbus, Macon, Cordele, Albany, 
Valdosta,* Dublin, Montezuma, Rome, and Athens, 
Ga. It has a line of railroad running frofri Louisville 
and Cincinnati to Atlanta, but does not reach Atlanta 
via Nashville. 

The N. C. & St. L. owns and operates a line of 
railroad from Hickman, Ky., on the Mississippi 
River, to Nashville, crossing the Tennessee River 
at Johnsonville, and from Nashville to Atlanta via 
Chattanooga. Its rails do not reach Columbus, 
Macon, Cordele, Albany, Valdosta, Dublin, Monte¬ 
zuma, Rome, and Athens, Ga. The rebilling or re¬ 
shipping privilege condemned by the order of the 
Commission is as follows: 

On grain, grain products, and hay shipped to Nash¬ 
ville by rail from or through Ohio or Mississippi 
River crossing points such as Louisville, Evansville, 
Hickman, Paducah, Cairo, etc., the L. & N. and 
N. C. & St. L. charge the full local freight rate from 
said crossing points to Nashville. These shipments 
may then be stopped at Nashville for a period not 
exceeding six months, during which time they may be 
rebilled or reshipped to destinations in Southeastern 
and Carolina territory; and on such reshipments so 
rebilled the freight charges into and out of Nashville 
are readjusted so that the total transportation charge 
on any one shipment from any given Ohio or Mis¬ 
sissippi River crossing, via Nashville, to any given 
destination in said territory, shall exactly correspond 


432 CASES BROUGHT IN THE COMMERCE COURT. 

with the transportation charge legally assessable on 
that shipment had it been billed and moved through 
from its point of origin at the said Ohio or Mississippi 
River crossing points to its final destination with¬ 
out having Been stopped in transit at Nashville. 

In the case of W. S. Duncan & Co. et al. v. N. C. & 
St. L. Ry. (16 I. C. C. Rep., 590) the Commission 
held this reshipment privilege above described to be 
an illegal device by which grain, grain products, and 
hay might be transported at less than the tariff rate 
applicable thereto, and also that it gave to Nashville 
an undue and illegal preference and advantage, and 
subjected other points in the Southeast to unjust and 
unreasonable prejudice and disadvantage. The or¬ 
der of the Commission, however, in the case cited, 
was held in abeyance until further consideration 
could be given to the general question of the validity 
of transit privileges. The matter was further con¬ 
sidered by the Commission, and in the case entitled 
“In the Matter of the Substitution of Tonnage at 
Transit Points” (18 I. C. C. Rep., 280) the Commis¬ 
sion refused to condemn transit privileges as such, 
but notified the carriers that such privileges must be 
carefully policed so that their use should not violate 
the law. 

In view of the conclusion reached in the case last 
cited, the Commission cited the parties in the case of 
W. S. Duncan & Co. et al. v. N. C. & St. L. Ry. et al. 
to appear and show cause why the order theretofore 
issued therein should not be changed and modified 
so that it would require the defendants therein to 


CASES BROUGHT IN THE COMMERCE COURT. 433 

cease and desist from discriminating in any respect 
whatever between Nashville, Tenn., and Atlanta, 
Columbus, Macon, Cordele, Albany, Valdosta, Dub¬ 
lin, Montezuma, Rome, and Athens, all located in 
the State of Georgia, and the shippers, consignees, 
and dealers, respectively, with respect to transit and 
reshipping privileges and practices as pertaining to 
grain, grain products, and hay, upon the ground that 
such discrimination was undue, unreasonable, and 
unlawful. After a full hearing on this order to show 
cause, the Commission made the order complained of 
in this proceeding. 

The Commission, in concluding their report which 
resulted in said order, used the following language: 

“ After a careful consideration of all the pertinent * 
facts and circumstances, we are of the opinion and 
find that the matters and things complained of herein 
constitute the undue and unreasonable preference and 
advantage and the undue and unreasonable pre¬ 
judice and disadvantage as between the parties to 
this proceeding prohibited by Section III of the act 
to regulate commerce.” 

We may start, then, with the proposition admitted 
that the reshipping privilege existing at Nashville 
is not unlawful in itself or the Commission would not 
have framed the order in the alternative. (Penn 
Refining Co. v. W. N. Y. & Penn. R. R., 208 U. S., 
208.) The discussion of the whole matter seems to 
be narrowed to two propositions: (1) Is the reship¬ 
ping privilege existing at Nashville a violation of Sec¬ 
tion III of the interstate commerce act with reference 

48250—S. Doc. 789, 62-2-28 


434 CASES BROUGHT IN THE COMMERCE COURT. 

to the Georgia points mentioned in the order? (2) 
The Commission having found that it is a violation 
of said section, may this court review said finding? 
Section III, above referred to, so far as material to 
the present inquiry, is as follows: 

“That it shall be unlawful for any common carrier 
subject to the provisions of this act to make or give 
any undue or unreasonable preference or advantage 
to any particular person, company, firm, corporation, 
or locality, or any particular description of traffic, 
in any respect whatsoever, or to subject any particu¬ 
lar person, company, firm, corporation, or locality, 
or any particular description of traffic, to any undue 
or unreasonable prejudice or disadvantage in any 
* respect whatsoever/’ 

The undisputed facts which gave rise to the estab¬ 
lishment of the reshipping privilege at Nashville by 
the N. C. & St. L. in 1872 and by the L. & N. in 1877 
are substantially as follows: 

Nashville is located on the Cumberland River 
about 190 miles above its confluence with the Ohio 
River, and the Cumberland is navigable below Nash¬ 
ville for about nine months in the year. The navi¬ 
gable season corresponds with the season for the 
handling of grain crops. Atlanta is located 289 
miles southeast of Nashville, and none of the Georgia 
points mentioned in the order of the Commission 
are on any navigable stream connecting them with 
the Mississippi, Ohio, or Cumberland Rivers. Before 
there were any rail connections between Nashville 
and the river gateways, such as Cincinnati, Louis- 


CASES BROUGHT IN THE COMMERCE COURT. 435 

ville, Evansville, Paducah, Cairo, Hickman, etc., 
and before there was even any rail connection between 
any of these river crossings and Atlanta and the 
Southeast, the Nashville & Chattanooga Railroad 
was completed from Nashville to Chattanooga as 
early as 1854. The cities of Charleston and Savannah 
contributed largely to the completion of this road 
and its connections with Atlanta and the seaboard 
for the purpose, expressed at the time, of connect¬ 
ing the cotton-producing section of the country with 
the grain fields of the West. The line from Charles¬ 
ton to Atlanta and Nashville was the first line and was 
and still is the shortest line from the Southeast to 
the western grain country, and was completed before 
there was any other rail connection between Nash¬ 
ville and the Southeast on the one hand and Cairo, 
Evansville, Louisville, or Cincinnati on the other. 
The Nashville & Chattanooga Railroad, as soon as 
it was completed to Nashville, was the means by 
which grain and all western commodities were sent 
into the Southeast. All this traffic of necessity 
came from the Wabash, Ohio, and Mississippi Rivers 
and up the Cumberland River by steamboat to 
Nashville, and was there loaded upon the cars of 
the Nashville & Chattanooga Railroad, the only rail 
line into the Southeast at that time. 

This movement of grain caused Nashville at that 
early day to become the concentration point for 
grain moving through Nashville as the first real gate¬ 
way, and over the Nashville & Chattanooga Railroad 
as the first rail line into the Southeast having direct 


436 CASES BROUGHT IN THE COMMERCE COURT. 

connections with the western waterways. Vast 
amounts of grain and other commodities were 
gathered in this way at Nashville by the boats of the 
Cumberland River, and transshipped by this first 
rail line to Atlanta and other points in southeastern 
territory. This was long before Cincinnati, Louis¬ 
ville, Cairo or Paducah or any of the other river 
crossings were grain gateways or concentration points 
for this trade. There were no rail connections north 
or west of Nashville until the L. & N. finished its 
line between Louisville and Nashville in 1859. 

At this time the L. & N. Railroad did not extend 
south of Nashville, and that road did not acquire any 
line south of Nashville until it leased the road from 
Nashville to Decatur in 1871, and completed the same 
to Montgomery in 1879. The Nashville & Chatta¬ 
nooga Railroad did not own a line west and north of 
Nashville until 1872, when it began to operate 171 
miles of railroad running from Nashville west, crossing 
the Tennessee River at Johnsonville, Tenn., and 
going to the Mississippi River at Hickman, Ky. This 
road then became interested in the hauling of grain 
and other commodities all the way from the Missis¬ 
sippi and Ohio Rivers on the west to Atlanta and 
southeastern territory. Prior to that time, the Nash¬ 
ville & Chattanooga Railroad had no interest in how 
the grain came to Nashville from the Mississippi and 
Ohio Rivers. 

After the 'Nashville & Chattanooga Railroad be¬ 
came the owner of the line of road from Hickman to 
Nashville it constructed and put in operation free 


CASES BROUGHT IN THE COMMERCE COURT. 437 

elevators on the Tennessee River at Johnsonville and 
on the Mississippi River at Hickman, and by so doing 
sought to attract shipments of grain moving from the 
Mississippi and Ohio Rivers to its 171-mile haul to 
Nashville, and then to carry it to the Southeast. It 
was found, however, that notwithstanding the estab¬ 
lishment of the free elevators at the points indicated, 
most of the grain from the Wabash, Mississippi, Ohio, 
and Cumberland River Valleys continued to come 
into Nashville by boat on the Cumberland River. 
The boat and rail rate from the Wabash, Ohio, and 
Mississippi River grain-producing valleys, via Hick¬ 
man and Johnson ville, to Nashville, was higher than 
the all-river rate accepted by the boats upon grain 
from these grain sections up to Nashville. The N. C. 
& St. L. Railroad was therefore obliged to take some 
steps to meet this situation in order to protect its 
railroad running from Nashville west, and to procure 
the longest possible haul from the grain-producing 
sections aforesaid to the grain-consuming territory in 
the Southeast. 

The N. C. & St. L. Railroad could have done this in 
either one of two ways. It could have fixed and 
accepted a very low local rate from the river cross¬ 
ings up to Nashville, thus meeting the steamboat 
competition; or it could have established a through 
rate from the river crossings to the Southeast via 
Nashville, protecting this through rate by extending 
the privilege of reshipping at Nashville. It chose to 
follow the latter course in order better to subserve and 
protect its revenues. A very low local rate up to 


438 CASES BROUGHT IN THE COMMERCE COURT. 

Nashville would have unnecessarily sacrificed revenue. 
This low rate would have been applicable to all the 
grain locally consumed at Nashville or points based 
on Nashville, and if the road had unduly reduced the 
local rate up to Nashville to meet the steamboat 
competition it would have been impossible to main¬ 
tain the existing scale of rates on other commodities 
besides grain which were going to Nashville in large 
quantities for local consumption. This was the 
origin of the reshipping privilege which has existed 
for forty years at Nashville. It was caused by com¬ 
petition in the shipment of grain from the Mississippi 
and Ohio Rivers by boat to Nashville on the Cumber¬ 
land River. 

The Cumberland River still exists, and Nashville 
is still located upon it. For all practical purposes, 
the situation, so far as competition on the Cumberland 
River is concerned, is the same potentially as it was 
in 1872. We must not deceive ourselves by believing 
that the L. & N. and the N. C. & St. L. extended this 
reshipping privilege to shippers and dealers at Nash¬ 
ville as a favor to the shippers and dealers or as a 
favor to Nashville. The simple truth is that the 
railroads extended the privilege to these shippers 
and dealers so as to obtain the shipment of grain 
from Mississippi and Ohio River crossings over their 
own lines. 

The crucial question then is: Were the L. & N. and 
the N. C. & St. L. compelled to extend the reshipping 
privilege to grain dealers at Nashville in order to suc¬ 
cessfully compete with the transportation of grain, 


CASES BROUGHT 11ST THE COMMERCE COURT. 439 

grain products, and hay on the Cumberland River? 
If they were, then the law of the land declares that the 
granting of the privilege to Nashville and not to 
Atlanta, where no such competition existed, would 
not be a violation of Section III of the act to regulate 
commerce. 

We may not annul the order for the reason, if it be 
so, that Nashville ought to be classed and equalized 
with Mississippi and Ohio River crossings, nor may 
we annul it for the reason that Nashville is a natural 
concentration point or primary market for grain, if 
it be so, nor on the ground that Nashville is the 
proper place for stoppage of grain in order to protect 
the grain itself by handling and drying. We must 
annul the order, if at all, upon the ground that upon 
the undisputed facts the law declares that there is no 
violation of Section III of the act to regulate com¬ 
merce. 

We think that the undisputed facts demonstrate 
that the reshipping privilege was extended to ship¬ 
pers and dealers at Nashville on account of the 
competition on the Cumberland River, and on that 
account alone, and that the undisputed evidence 
would not support any other finding upon that prop¬ 
osition. It is alleged that the railroads bought 
into the situation at Nashville and therefore can not 
be heard to say that they were compelled to meet the 
Cumberland River competition. This reasoning would 
prohibit the building of all railroads, as no one would 
build a railroad if it were to be held that all compe¬ 
tition met in the operation of the same should be 


440 CASES BROUGHT IN THE COMMERCE COURT. 

considered voluntary because the road had been 
voluntarily built. The unsoundness of such argument 
does not require demonstration. 

In East Tennessee, Virginia & Georgia Railway 
Co. v. Interstate Commerce Commission (181 U. S., 
18) the Supreme Court, speaking of the section of 
the interstate commerce law involved in this case, 
used the following language: 

“The prohibition of the 3rd section, when that sec¬ 
tion is considered in its proper relation, is directed 
against unjust discrimination or undue preference 
arising from the voluntary and wrongful act of the 
carriers complained of as having given undue pref¬ 
erence, and does not relate to acts the result of condi¬ 
tions wholly beyond the control of such carriers .’ 9 

In the same case the Supreme Court said: 

“ The only principle by which it is possible to enforce 
the whole statute is the construction adopted by the 
previous opinions of this court; that is, that compe¬ 
tition which is real and substantial and exercises a 
potential influence on rates to a particular point, 
brings into play the dissimilarity of circumstance 
and condition provided by the statute and justifies 
the lesser charge to the more distant and competitive 
point than to the nearer and noncompetitive place, 
and that this right is not destroyed by the mere fact 
that incidentally the lesser charge to the competitive 
point may seemingly give a preference to that point, 
and the greater rate to the noncompetitive point may 
apparently engender a discrimination against it. 
We say seemingly on the one hand and apparently on 


CASES BROUGHT IN THE COMMERCE COURT. 441 

the other, because in the supposed cases the prefer¬ 
ence is not ‘ undue’ or the discrimination ‘ unjust/ 
This is clearly so, when it is considered that the lesser 
charge upon which both the assumption of preference 
and discrimination is predicated is sanctioned by the 
statute, which causes the competition to give rise to 
the right to make the lesser charge. Indeed, the find¬ 
ings of fact made by the Commission in this case leave 
no room for the contention that either undue prefer¬ 
ence in favor of Nashville or unjust discrimination 
against Chattanooga arose merely from the act of the 
carriers in meeting the competition existing at Nash¬ 
ville.” 

It is true that the language last above quoted was 
used in reference to the influence of competition on 
Section IV of the interstate commerce act before its 
amendment, but the same reasoning must apply with 
equal force to cases under Section III, for it has been 
uniformly held by the courts that the prohibition 
contained in Section IV is but one of the kinds of 
competition denounced by Section III. ( Texas & 
Pacific Ry. Co. v. Interstate Commerce Commission , 
162 U. S., 197; Interstate Commerce Commission v. 
Alabama Midland Railway, 168 U. S., 144; L. & N. 
R. R. v. Behlmer, 175 U. S., 648.) 

In the recent case of Interstate Commerce Commis¬ 
sion v. Diffenbaugh (222 U. S., 42) and Peavey & Co. 
v. Union Pacific R. R. Co. (176 Fed., 423) it was held 
that the payment of an elevator charge by a railroad 
company which is compelled by competition is law¬ 
ful. The Interstate Commerce Commission itself has 


442 CASES BROUGHT IN THE COMMERCE COURT. 

in a large number of cases recognized competition, 
and especially water competition, as influential upon 
the establishment of reasonable rates. ( Commercial 
Club of Omaha v. Chicago Ry. Co., 7 I. C. C. Rep., 404; 
Raworth v. Northern Pacific R. R. Co., 3 I. C. C. Rep., 
862; Chattanooga Board of Trade, 10 I. C. C. Rep., 
133; E. Sonheimer Co. v. III. Cen. R. R. Co., 17 I. C. C. 
Rep., 60; Bulte Milling Co. et al. v. Chicago & Alton 
R. R., 15 I. C. C. Rep., 351; Monroe Progressive 
League v. St. L. I. M. & S. Ry., 15 I. C. C., Rep., 534; 
Indianapolis Freight Bureau v. P. R. R. Co., 15 I. C. C. 
Rep., 567; Columbia Grocery Co. v. L. & X. R. R., 
18 I. C. C. Rep., 502.) 

It is earnestly claimed, however, that as the Inter¬ 
state Commerce Commission found that this reship¬ 
ping privilege at Nashville was a discrimination 
against Atlanta and the other Georgia points, that 
this court is concluded by that finding. In the case 
of A. T. & S. F. Ry. Co. et al. v. Interstate Commerce 
Commission (188 Fed., 229) this court said: 

“ In other words, as in this case, where all the facts 
are undisputed, we do not think the Commission 
can by an ultimate finding based upon the undis¬ 
puted facts preclude this court from reaching a con¬ 
clusion of its own upon such undisputed and ad¬ 
mitted facts. When the facts are undisputed, there 
is no occasion for the facts to be found, and the ulti¬ 
mate conclusion of the Commission is a mixed ques¬ 
tion of law and fact which certainly ought not to be 
held to be conclusive upon this court.” 


CASES BROUGHT IN THE COMMERCE COURT. 443 

Where the facts of a case are admitted and the 
question is what the judgment of a tribunal shall be 
upon such admitted facts, the case stands in the same 
position as if the facts had been found and the ques¬ 
tion should arise as to what should be the judgment 
upon the facts so found. This is always a question 
of law. So in the present instance, the facts being 
undisputed, the question arises whether these facts 
show a violation of Section III, and the solution of 
the question involves a consideration and interpreta¬ 
tion of said section which is peculiarly a question of 
law and within the power of this court to decide. 

In Interstate Commerce Commission v. Union Pacific 
R. R. (222 U. S., 541) it was said by the Supreme 
Court: 

“ There has been no attempt to make an exhaust¬ 
ive statement of the principles involved, but in cases 
thus far decided it has been settled that the orders 
of the Commission are final unless inter alia * * * 

(3) based upon a mistake of law.” 

Again, in the case of State of Washington ex rel . 
Oregon R. R. & Navigation Co. v. H. A. Fairchild 
et al. } the question was presented as to whether, as 
a matter of law, the facts proved showed the exist¬ 
ence of such a public necessity as authorized the 
taking of property, and the Supreme Court held in 
that case that the facts did not show the existence 
of such public necessity, although the Railroad 
Commission of the State of Washington had found 
otherwise. The Supreme Court cited the cases of 


444 CASES BROUGHT IN THE COMMERCE COURT. 

Kansas City Railway Co. v. Albers Commission Co., 
Cedar Rapids Gas Light Co. v. Cedar Rapids , and 
Graham v. Gill, decided by that court but not yet 
officially reported. 

Our conclusion in regard to the whole case is that 
under the facts appearing in the record the reship¬ 
ping privilege at Nashville is not in violation of 
Section III, nor a discrimination in favor of Nash¬ 
ville as against Atlanta and the other Georgia points, 
and that the facts being undisputed it is within the 
undoubted power of this court to so declare as a 
matter of law applicable to such a state of facts. 

The order of the Interstate Commerce Commission 
complained of in this proceeding will therefore be 
annulled and the motion to dismiss denied. And it is 
so ordered . 

Hunt, Judge , dissenting. 


United States Commerce Court. 


No. 49.— October Session, 1911. 


Lehigh Valley Railroad Company, petitioner 
v. 

United States, respondent, Interstate Commerce 
Commission and Henry E. Meeker, intervening 
respondents. 

ON motion for preliminary injunction. 

Mr. Frank H. Platt , with whom Mr. E. H. Boles , 
Mr. John G. Johnson , and Mr. Everett Warren were 
on the brief, for the petitioner. 

Mr. Blackburn Ester line , special assistant to the 
Attorney General, with whom Mr. James A. Fow¬ 
ler , Assistant to the Attorney General, was on the 
brief, for the United States. 

Mr. CharlesW. Needham, for the Interstate Com¬ 
merce Commission. 

Mr. William A. Glasgow , jr., for intervening 
shipper. 

Before Knapp, Presiding Judge, and Archbald, 
Hunt, Carland, and Mack, Judges. 

[Oct. 12, 1911.] 

Per Curiam: 

Without expressing any opinion as to whether 
the petition and supporting affidavits disclose a 

445 





446 CASES BROUGHT IN THE COMMERCE COURT. 

state of facts which if established on the trial of 
the case would entitle the petitioner to the relief 
prayed for, it is the judgment of the court, in 
view of the matters set forth in the report of the 
commission, which is made a part of its order, and 
the presumptions of the validity of the order, that 
the motion for a preliminary injunction should be 
denied, and it will be so ordered. 


United States Commerce Court 


Nos. 50 and 51. —October Session, 1911. 


Atchison, Topeka & Santa Fe Railway 

CO. ET AL., PETITIONERS, 

VS. 

United States of America, respondent. 


No. 50. 


Union Pacific Railroad Co. et al., 
petitioners, 
vs. 

United States of America, respondent. 


No. 51, 


Interstate Commerce Commission, City of 
Spokane et al., Chicago Association of Com¬ 
merce, Portland Chamber of Commerce et al.. 
Interior Counties Freight Bureau of South¬ 
ern California et al., Giroux Consolidated 
Mines Company, interveners. 


on motions for preliminary injunctions and on 

MOTIONS TO DISMISS. 

For opinions of Interstate Commerce Commis¬ 
sion see 21 I. C. C. Rep., 329 and 400. 

Mr. Charles Donnelly , Mr. F. C. Dillard , and 
Mr. Robert Dunlap , with whom Mr. T. J. Norton, 
Mr. E. C. Lindley , Mr. R. B. Scott , Mr. Burton 

447 







448 CASES BROUGHT IN THE COMMERCE COURT. 

Hanson, Mr. James G. Jeffery, Mr. H. A. Scan - 
drett , Mr. W. F. Herrin, and Mr. Gardiner Lathrop 
were on the brief, for the petitioners. 

Mr. J. N. Teal for cities of Seattle, Tacoma, and 
Portland. 

Mr. James A. Fowler , Assistant to the Attorney 
General, and Mr. Blackburn Esterline, special as¬ 
sistant to the Attorney General, for the United 
States. 

Mr. P. J. Farrell for the Interstate Commerce 
Commission. 

Mr. H , M. Stephens for city of Spokane et al. 

Mr. Byron Waters for Interior Counties Freight 
Bureau of Southern California et al. 

Before Knapp, Presiding Judge, and Archbald, 
Hunt, Carland, and Mack, Judges. 

[Nov. 14, 1911.] 

Mack, Judge: 

These cases involve the constitutionality and in¬ 
terpretation of section 4 of the act to regulate com¬ 
merce of February 4,1887, as amended June 18,1910 
(36 Stat., 539), and the powers of the Interstate 
Commerce Commission thereunder. 

The sections as originally framed and as 
amended follow in parallel columns. The omis¬ 
sions from the original section and the additions in 
the amended section are italicized. 

Sec. 4. That it shall be un- Sec. 4. (As amended June 
lawful for any common car- 18, 1910.) That it shall be 
rier subject to the provisions unlawful for any common car- 
of this act to charge or re- rier subject to the provisions 
ceive any greater compensa- of this act to charge or re- 


CASES BROUGHT IN THE COMMERCE COURT. 449 


tion in the aggregate for the 
transportation of passengers 
or of like kind of property, 
under substantially similar 
circumstances and conditions , 
for a shorter than for a longer 
distance over the same line, in 
the same direction, the shorter 
being included within the 
longer distance; but this shall 
not be construed as authoriz¬ 
ing any common carrier with¬ 
in the terms of this act to 
charge and receive as great 
compensation for a shorter as 
for a longer distance: Pro¬ 
vided, however , That upon 
application to the Commis¬ 
sion appointed under the pro¬ 
visions of this act , such com¬ 
mon carrier may, in special 
cases, after investigation by 
the Commission , be author¬ 
ized to charge less for longer 
than for shorter distances for 
the transportation of passen¬ 
gers or property; and the 
Commission may from time to 
time prescribe the extent to 
which such designated com¬ 
mon carrier may be relieved 
from the operation of this sec¬ 
tion of this act . 


ceive any greater compensa¬ 
tion in the aggregate for the 
transportation of passengers, 
or of like kind of property, 
for a shorter than for a longer 
distance over the same line or 
route in the same direction, 
the shorter being included 
within the longer distance, or 
to charge any greater compen¬ 
sation as a through route than 
the aggregate of the interme¬ 
diate rates subject to the provi¬ 
sions of this act; but this shall 
not be construed as authoriz¬ 
ing any common carrier within 
the terms of this act to charge 
or receive as great compensa¬ 
tion for a shorter as for a 
longer distance : Provided , 
however , That upon applica¬ 
tion to the Interstate Com¬ 
merce Commission such com¬ 
mon carrier may in special 
cases, after investigation, 
be authorized by the Commis¬ 
sion to charge less for longer 
than for shorter distances for 
the transportation of passen¬ 
gers or property; and the 
Commission may from time to 
time prescribe the extent to 
which such designated com¬ 
mon carrier may be relieved 
from the operation of this 
section: Prodded further , 

That no rates or charges law¬ 
fully existing at the time of 
the passage of this amendatory 
act shall be required to be 


48250—S. Doc. 789, 62-2-29 


450 CASES BROUGHT IN THE COMMERCE COURT. 

changed by reason of the pro¬ 
visos of this section prior to 
the expiration of six months 
after the passage of this act , 
nor in any case where applica¬ 
tion shall have been filed before 
the Commission , in accordance 
with the provisions of this sec¬ 
tion , until a determination of 
such application by the Com¬ 
mission. 

Whenever a carrier by rail¬ 
road shall in competition with 
a water route or routes reduce 
the rates on the carriage of any 
species of freight to or from 
competitive points, it shall not 
be permitted to increase such 
rates unless after hearing by 
the Interstate Commerce Com¬ 
mission it shall be found that 
such proposed increase rests 
upon changed conditions other 
than the elimination of watet' 
competition. 

At the time of the amendment a number of com¬ 
plaints of unreasonable and unjustly prejudicial 
rates filed by commercial bodies of the so-called 
intermountain cities, such as Spokane, Washing¬ 
ton; Reno, Nevada; and Phoenix, Arizona, were 
pending before the Commission. Similar com¬ 
plaints had been filed and partial adjustments 
thereof made at various times, beginning with the 
year 1892. Because of the amendment, the Com¬ 
mission refrained from finally determining the 
commodity rates to which these cities were entitled 


CASES BROUGHT IN THE COMMERCE COURT. 451 

on west-bound traffic, believing that orders made 
under applications for relief, as provided in sec¬ 
tion 4, would obviate the necessity therefor. 

Applications were duly filed in a form prescribed 
by the Commission, which required carriers to 
state that the rate to the intermediate points should 
not be more than a certain number of cents per 100 
pounds, per ton, per car, or per package, in excess 
of the rates to the farther point, in and by which 
applications the carriers asked to be allowed to 
maintain the Pacific coast terminal rates then in 
force, lower than the rates to intermediate points 
fixed by specified tariffs on file with the Commission. 

After a full hearing and investigation two 
reports and orders were made. Each report was 
entitled in the matter of the application under sec¬ 
tion 4. One of them was also entitled in the matter 
of the then pending Nevada and Arizona complaints 
(21 I. C. C. Rep., 329), although the order based 
thereon was entitled only in the matter of the ap¬ 
plications under section 4; the other report was also 
entitled in the matter of the then pending Spokane 
and Salt Lake City complaints (21 I. C. C. Rep., 
400), although the order based thereon was entitled 
only in the matter of the Spokane complaint. 

The first order provided that for the purposes 
of the disposition of the applications the United 
States should be divided into five zones (being the 
same as those specified in a Transcontinental Tariff 
on file), as follows: 


452 CASES BROUGHT IN THE COMMERCE COURT. 

Zone No. 1 should comprise all that portion of the 
United States lying west of a line called Line No. 1, 
which extends in a general southerly direction from 
a point immediately east of Grand Portage, Minn. ; 
thence southwesterly, along the northwestern shore 
of Lake Superior, to a point immediately east of 
Superior, Wis.; thence southerly, along the eastern 
boundary of Transcontinental Group F, to the in¬ 
tersection of the Arkansas and Oklahoma State 
line; thence along the west side of the Kansas City 
Southern Railway to the Gulf of Mexico. 

Zone No. 2 should embrace all territory in the 
United States lying east of Line No. 1 and west of a 
line called Line No. 2, which begins at the interna¬ 
tional boundary between the United States and 
Canada, immediately west of Cockburn Island, in 
Lake Huron; passes westerly through the Straits 
of Mackinac; southerly through Lake Michigan to 
its southern boundary; follows the west boundary 
of Transcontinental Group C to Paducah, Ky.; 
thence follows the east side of the Illinois Central 
Railroad to the southern boundary of Transcon¬ 
tinental Group C; thence follows the east boundary 
of Group C to the Gulf of Mexico. 

Zone No. 3 should embrace all territory in the 
United States lying east of line No. 2 and north of 
the south boundary of Transcontinental Group C, 
and on and west of line No. 3, which is the Buffalo- 
Pittsburgh line from Buffalo, N. Y., to Wheeling, 
W. Va., marking the western boundary of Trunk 


CASES BROUGHT IN THE COMMERCE COURT. 453 

Line Freight Association territory; thence follows 
the Ohio River to Huntington, W. Ya. 

Zone No. 4 should embrace all territory in the 
United States east of line No. 3 and north of the 
south boundary of Transcontinental Group C. 

Zone No. 5 should embrace all territory south and 
east of Transcontinental Group C. 

The order then proceeded as follows: 

“It is further ordered, (1) That those portions of 
the above-numbered applications that request au¬ 
thority to maintain higher commodity rates from 
points in Zone No. 1 to intermediate points than to 
Pacific coast terminals be, and the same are hereby, 
denied, effective November 15, 1911; (2) that peti¬ 
tioners herein be, and they are hereby, authorized to 
establish and maintain, effective November 15, 
1911, commodity rates from all points in zones num¬ 
bered 2, 3, and 4, as above defined, to points inter¬ 
mediate to Pacific coast terminals that are higher 
to intermediate points than to Pacific coast termi¬ 
nals ; provided, that the rates to intermediate points 
from points in zones numbered 2, 3, and 4 shall not 
exceed the rates on the same commodities from the 
same points of origin to the Pacific coast terminals 
by more than 7 per cent from points in Zone No. 2, 
15 per cent from points in Zone No. 3, and 25 per 
cent from points in Zone No. 4. 

The Commission does not hereby approve any 
rates that may be established under this authority, 
all such rates being subject to complaint, investiga¬ 
tion, and correction if they conflict with any other 
provisions of the act. ’ ’ 

The second order is similar in all respects except 
that it refers only to Spokane and certain other 
intermountain cities, and expressly provides that 


454 CASES BROUGHT IN THE COMMERCE COURT. 

the carriers shall comply therewith for a period of 
not less than two years. 

The two suits brought in this court to enjoin the 
enforcement of these orders, respectively, were 
heard together. The same questions are presented 
in each of them. 

First. We agree with the Commission that sec¬ 
tion 4 of the act to regulate commerce as amended 
June 18, 1910, is constitutional. The Commission 
concedes, and we concur therein, that if the first pro¬ 
viso in this section is to be literally construed and 
if, under such construction, no limit has been im¬ 
posed upon and no standard given to guide 
the exercise of the Commission’s discretion in 
granting authority to depart from the rule for¬ 
bidding a lesser rate for the long than for the short 
haul in the same direction and over the same line 
or route, the proviso would be unconstitutional as 
an unlawful delegation of legislative power. We 
concur, too, in the Commission’s view that if the 
proviso were for this reason illegal the entire sec¬ 
tion would thereby be nullified, inasmuch as both 
the context and the history of the act demonstrate 
that the proviso is an integral part of the section, 
and that a hard and fast rule absolutely prohibiting 
such a lesser rate would not have been enacted. 

To determine, however, the true meaning of the 
proviso, the entire act must be examined. In the 
light of the other sections, and of the legislative and 
judicial history of the long and short haul clause, 
we are of the opinion that the guide to the exercise 


CASES BROUGHT IN THE COMMERCE COURT. 455 

of the Commission’s discretion is to be found in the 
other sections of the act, thereby making the discre¬ 
tion to exempt carriers from the prohibition in 
fact not unlimited, and imposing upon the Com¬ 
mission not merely the right but also the duty to 
grant such exemption whenever, on investigation, 
it shall find that no violation of any section of the 
act would thereby be involved. 

If, therefore, the proposed rate, lower for the 
long than for the short haul, violates no provision of 
the act, and if, in particular, it neither tends to 
produce an unreasonable rate for the short haul 
nor operates unduly to prejudice the short-haul 
point and unduly to prefer the long-haul point, it is 
the duty of the Commission to grant exemption 
from the hard and fast rule laid down in the first 
clause of section 4. 

Second. The orders sought to be enjoined do not 
establish absolute rates for either the long or short 
haul or prescribe the extent, in dollars and cents, 
that the short-haul rate may exceed the present or 
some definitely fixed long-haul rate, but they do 
establish a relation between any long-haul rate that 
the carrier may put into effect and the short-haul 
rate, determining that from zone one the western 
short-haul rate shall not exceed the long-haul rate, 
and that from zones two, three, and four, the short- 
haul shall not exceed the long-haul rate by more 
than 7%, 15%, and 25%, respectively. 

The Commission found specifically that the Pa¬ 
cific coast rates from part of this eastern territory 


456 CASES BROUGHT IN THE COMMERCE COURT. 

were forced by water competition, and that the 
rates from other parts were forced by market com¬ 
petition ; for example, that the railroads based the 
New York-Seattle rate on the ocean competition 
and that they granted the same rate from St. Paul 
to Seattle in order to enable St. Paul to compete 
with New York in the Seattle market. 

Under the fourth section as originally framed, 
it was decided (E. T., etc., Ry. Co. v. I. C. C., 181 
U. S., 1, and cases cited therein) that carriers 
might, in the first instance and without applica¬ 
tion to the Commission, make the rate less for 
the long than for the short haul, if, in fact, the 
circumstances and conditions were not substan¬ 
tially similar, taking their chances on a subsequent 
determination by a court that they had erred in 
so doing and had thereby violated the law. They 
could, however, and in many instances did, apply to 
the Commission for the authority. After the sec 
tion was construed as not requiring such an appli¬ 
cation in the first instance, the carriers, it was often 
charged, abused their privilege by making the rate 
for the long haul less than for the short haul, 
although the circumstances and conditions were 
substantially similar; this charge was, in any event, 
one of the causes that led to the amendment of the 
section whereby the clause “ under substantially 
similar circumstances and conditions ” was elimi¬ 
nated therefrom. The practical change thereby 
produced in section 4 was to compel the carriers to 


CASES BROUGHT IN THE COMMERCE COURT. 457 

make application to the Commission if they desired 
to continue this practice. 

The violation of the long and short haul 
rule is, however, only one instance — a most 
striking and irritating one, it is true — of the 
preference and prejudice which, when undue, 
is prohibited by section 3. Any violation of 
the original fourth section would necessarily 
involve a violation of the third section and, 
e converso, if the lesser rate for the long haul than 
for the short were not in violation of the third sec¬ 
tion it could not be in violation of the original 
fourth section. In E. T., etcRy. Co . v. I. C . C., 
supra, the court held that when it is established that 
the rates charged to the shorter distance point are 
just and reasonable in and of themselves, and that 
the lesser rate for the longer haul is not wholly 
unremunerative and has been forced upon the car¬ 
riers by competition at the longer distance point, 
it must result that a discrimination springing alone 
from a disparity in rates can not be held to be, in 
legal effect, the voluntary act of the carriers, and that 
therefore the provisions of the third section will 
not apply. The prohibition of the third section, 
it was said, is directed against undue preference 
arising from the voluntary and wrongful act of 
the carriers, and does not relate to acts the result 
of conditions wholly beyond the control of such 
carriers; the lesser rate for the long haul could not 
produce an unjust preference under the third sec- 


458 CASES BROUGHT IN THE COMMERCE COURT. 

tion when the competitive conditions at the longer 
distance point which had caused the lesser rate 
would produce the same preference, even though 
the carrier were forbidden to meet the competition. 
For example, as Seattle can get its supplies from 
New York by water, and Spokane, because of its 
location, can not do so, Seattle can not be said to be 
unduly favored merely because the rail carrier, 
in order to meet the water competition, charges 
a lesser rate from New York to Seattle through 
Spokane than from New York to Spokane, pro¬ 
vided the Spokane rate is reasonable per se and 
the Seattle rate not unremunerative. And so, too, 
if the St. Paul-Seattle rate is reduced to a point 
less than reasonable per se although not unremu¬ 
nerative, to meet the New York-Seattle rate in 
order to enable the St. Paul merchants to compete 
with New York merchants at Seattle, Spokane 
could not complain merely because this rate is made 
less than the St. Paul-Spokane rate. In each of 
these cases Spokane is not unduly prejudiced, be¬ 
cause if the lower rail rate to Seattle were for¬ 
bidden Seattle would nevertheless, by reason of its 
location, be able to secure its supplies by water, 
and would therefore in the nature of things have 
this advantage over Spokane. 

While the primary question in the E. T., etc., Ry. 
Co. case, supra, w T as as to the right of the carriers, in 
the first instance and without application to the 
commission, to make lesser rates for the long than 


CASES BROUGHT IN THE COMMERCE COURT. 459 

for the short haul, inasmuch as the original com¬ 
plaint charged a violation of both the third and 
the fourth sections, the court necessarily consid¬ 
ered section 3, and held that it could not be violated 
by making a lesser charge for the long than for the 
short haul, if the long-haul rate was forced by 
competition and was not unremunerative. 

This construction of section 3 was not dependent 
upon the clause in section 4 which, by the amend¬ 
ment of 1910, has been stricken out. It was based 
upon the language of section 3 itself, which forbade 
not any preference but only an undue preference, 
and upon the determination that, in the nature of 
things, there could be nothing undue in a prefer¬ 
ence which was caused by the natural geographi¬ 
cal situation, and which would continue even if 
there were no railroad carriage. The amendment 
to section 4, therefore, has not changed the con¬ 
struction of section 3, and it follows that no unjust 
prejudice to Spokane and other interior points can 
now be predicated merely on the fact that the rate 
from any of the eastern territory is less to the Pa¬ 
cific coast terminals than to the intermediate points. 

The Commission also found, however, that the 
present Pacific coast rates from zone one had 
not been proven by the carriers, upon whom the 
burden was laid, to be less than reasonable per se. 
Assuming that they were fully reasonable per se, 
the Commission would have the power to refuse ex¬ 
emption from the long and short haul requirement, 


460 CASES BROUGHT IN THE COMMERCE COURT. 

for under these circumstances any higher rates to 
intermediate points could be condemned as unrea¬ 
sonable and thus in violation of section 1 of the act. 

But the order of the Commission as to this ter¬ 
ritory is not limited to a denial of the applications 
in the form in which they were presented, that is, 
to a denial of the maintenance of the then prevail¬ 
ing rates to the coast concurrently with higher rates 
to the interior points. It forbids the carrier 
to maintain any coast rate lower than the con¬ 
temporaneous intermediate rate from these points. 
In other words, if the carrier from St. Paul 
in order to meet new water competition from 
New York should reduce the St. Paul-Seattle rate 
to a point less than at present and less than a rate 
reasonable per se, but nevertheless somewhat re¬ 
munerative, it would be compelled, under this 
order, to grant the same rate to the interior point, 
even though, under these circumstances, a reason¬ 
able rate to the interior point higher than the un¬ 
reasonably low rate to the coast point forced upon 
the carrier by such market competition under 
penalty of losing the business would not be in vio¬ 
lation of section 1 or of any other provision of 
the act. 

This is likewise true of the order as to rates from 
the other zones. It is not based upon the current 
coast rates. It determines the relation of the short- 
haul rates to any coast rates that might be estab¬ 
lished by the carriers. It makes illegal a rate from 
Chicago to Spokane more than 7 per cent higher 


CASES BROUGHT IN THE COMMERCE COURT. 461 

than an unreasonably low but remunerative 
Chicago-Seattle rate forced by competition, even 
though the Chicago-Spokane rate be reasonable 
per se and not in violation of any provision of the 
act. 

Is the Commission empowered to make such an 
order? It is urged that even if it must grant an 
application for relief, when the lower long-haul rate 
involves no violation of the act, nevertheless it may 
determine the extent of the exemption and there¬ 
fore it may fix the relation of rates. 

But to sustain the constitutionality of the pro¬ 
viso in section 4 it must be read as imposing the 
duty on the Commission not only to grant exemption 
from the hard and fast rule when thereby no sec¬ 
tion of the act is violated, but also to grant such 
exemption to the extent that no section of the act is 
thereby violated; that is, the carrier is entitled 
under the act to be granted authority to charge as 
much less as it please for the long haul than for 
the short haul, provided the Commission shall first 
determine that it does not thereby violate any other 
provision of the law. In granting authority to* 
make an absolute long-haul rate lower than some 
short-haul rate, the Commission would have the 
power and the duty to prevent a violation of sec¬ 
tion 1 and, by virtue of its authority to deter¬ 
mine reasonable rates, to fix the short-haul rate. 

Doubtless the Commission could, moreover, in 
order to prevent a violation of section 3, make rela¬ 
tive rates in so far as this might be necessary to pre- 


462 CASES BROUGHT IN THE COMMERCE COURT. 

vent an undue preference. For while, under the de¬ 
cision in E. T., etc., Ry. Co. v. I. C. C., supra, undue 
preference could not be predicated merely on the 
fact that the rate was less for the long than for the 
short haul, when the former was forced by water, 
market, or any kind of competition, it might be 
predicated thereon if the short-haul rate were not 
likewise based upon the same competition in so far 
as and to the extent that it ought fairly to be influ¬ 
enced thereby. For example, if the St. Paul-Seattle 
rate be made less than reasonable although remu¬ 
nerative to meet the forced New York-Seattle rate 
so as to enable St. Paul to compete with New York 
in the Seattle market, Spokane might complain of 
unreasonable prejudice against it if the St. Paul- 
Spokane rate were made higher than the New 
York-Spokane rate and thereby similar competi¬ 
tion were prevented at Spokane. So, too, as its 
merchants could get their supplies through Seattle 
at a price based on the New York-Seattle freight 
rate plus the back-haul rate, Spokane might have 
grounds for complaint of undue prejudice if the 
rate either from St. Paul or New York to Spokane 
were made higher than the rate from such point to 
Seattle plus the back haul, because only to the ex¬ 
tent of the back-haul cost could Spokane be said 
to be in any different position than Seattle, and 
therefore only to that extent could it justly be 
deprived of the benefits of the same competitive 
forces which determine the Seattle rate. 


CASES BROUGHT IN THE COMMERCE COURT. 463 

But neither the equality of rates on shipments 
from zone 1 nor the relation between the rates on 
shipments from the other zones, as fixed in the 
order of the Commission, can be sustained upon any 
such considerations. In so far as the Commission 
attempts thus to determine the relation of the long 
and short haul rates, irrespective of absolute rates, 
it goes beyond any authority that has been vested in 
it, for it is not in the power of the Commission to 
say that 100 per cent, 107 per cent, or any given 
percentage of an unknown less than reasonable rate 
to the coast is necessarily a maximum reasonable 
and non-discriminatory rate from the same point of 
origin to an interior point. 

The practical effect of the Commission’s order is 
either to compel a blanket rate from the entire east 
to the entire west, or to prevent the carriers from 
getting all the business which they now secure with¬ 
out loss by making rates which enable merchants 
to meet market competition. For example, if the 
forced New York-Seattle rate is $1, the St. Paul- 
Seattle rate can not be made higher by the St. 
Paul carrier, unless it gives up the benefit of busi¬ 
ness which market competition at Seattle might 
bring to it. As long as it charges no one else an 
unreasonable rate, and as long as it does not carry 
under cost, it is entitled to grant St. Paul the 
market competitive rate of $1. Under the order, 
its rate to Spokane in that event could not exceed 
$1, while the New York carrier could charge 


464 CASES BROUGHT IN THE COMMERCE COURT. 

$1.25. The latter, however, would also have the 
right to enable New York to meet St. Paul com¬ 
petition in Spokane. To do this it would have to 
reduce the New York-Spokane rate to $1. The 
result would be either to compel a blanket rate from 
all points east of St. Paul to all competitive points 
west of St. Paul or to force the carriers to give up 
some business which could be carried without loss 
to themselves or damage to anyone else. The Com¬ 
mission’s order, moreover, does not even secure to 
Spokane the market competition of St. Paul and 
New York, since it empowers the railroads to 
charge a higher rate from New York, which might 
exclude New York from the Spokane market. 

In a word, unless some through business is given 
up, the effect of the orders would be to put Spokane 
and other interior points on an equality with Seat¬ 
tle and other Pacific coast points, at least from zone 
one,—a position to which they would not be entitled 
under all circumstances in view of their relative 
locations, the former four hundred miles more or 
less in the interior, the latter on the coast. 

It follows that the motions to dismiss the peti¬ 
tions must he denied and that writs to enjoin 
the enforcement of the orders, pending the final 
determination of the cases, must he issued . And 
it is so ordered . 

Archbald, Judge, concurring: 

It is conceded that if the right to approve or dis¬ 
approve of an application by a carrier to charge 
more for a shorter than for a longer haul is left by 


CASES BROUGHT IK THE COMMERCE COURT. 46.5 

the fourth section of the interstate commerce act, 
as it is at present amended, to the uncontrolled dis¬ 
cretion of the Commission, the section is invalid; 
also, that the proviso taken as it reads in terms con¬ 
fers such unlimited discretion; and that the section 
is only therefore to be saved in case a guide is found 
in other provisions of the statute. 

“ That section provides,” says Mr. Commissioner 
Prouty, “ that no carrier shall charge more for 
the short than for the long haul unless upon appli¬ 
cation to the Commission permission to do so is 
granted by it. If this section were read by itself 
and were taken at its literal face meaning, the Com¬ 
mission would possess unrestricted power to grant 
or deny such application. It could permit in one 
case and refuse in another, according as its fancy 
might dictate. So construed, the proviso would 
probably be void as a delegation of legislative au¬ 
thority. The making of rates is a legislative func¬ 
tion. To say whether a carrier shall or shall not be 
allowed to charge more for the short than for the 
long haul is virtually the making of rates, and 
therefore an attribute of the legislature. To invest 
an administrative body like this Commission with 
that unrestricted and unguided authority would be 
to give it legislative power, which can not be done 
under our Federal Constitution. It is one thing to 
authorize such a body to administer the law in 
accordance with certain rules and standards pre¬ 
scribed by the legislature and an entirely different 
thing to turn over to it the exercise of the legislative 

48250—S. Doc. 789 62-2-30 


466 CASES BROUGHT IN THE COMMERCE COURT. 

discretion itself . 91 Proceeding to consider whether 
the proviso could be separated from the rest of the 
section and the prohibitive part of it, where the 
charging of more for a shorter than for a longer 
haul over the same line in the same direction is for¬ 
bidden, be sustained without regard to it, it was 
further held that the proviso was an essential part 
of the section which manifestly would not have been 
enacted without it, and that the whole must there¬ 
fore stand or fall together. This is a correct expo¬ 
sition of the law, and could not have been better 
stated than is done in the opinion of the Commis¬ 
sion. But I do not see how, in the face of it, to 
escape the conclusion that the section is invalid. 
It is sustained by the Commission by importing into 
it the provisions of the first and third sections, 
which respectively prohibit unreasonable rates and 
unjust discriminations, where the requisite guide 
is found, as it is claimed, for the action of the Com¬ 
mission. “ Bearing in mind,” says the same 
learned and able Commissioner, “ the authority 
which the Commission now administers in prescrib¬ 
ing a reasonable rate and in declaring and correct¬ 
ing an undue preference, it seems evident that the 
purpose of Congress was to commit to this body the 
duty of determining whether if the carrier was per¬ 
mitted to charge a higher rate at the intermediate 
point that would result in a violation of the provi¬ 
sions of the act. But in so doing the Commission 
can not act arbitrarily. It must investigate each 
case, and if after such investigation it is of the 


CASES BROUGHT IN THE COMMERCE COURT. 467 

opinion that a departure from the rule of the fourth 
section would not result in unreasonable rates or 
undue discrimination it must permit that de¬ 
parture. If, upon the other hand, it is of the con¬ 
trary opinion, it must refuse the permission. Such 
is the only possible construction which can be put 
upon this section in connection with the entire act, 
and if any doubt as to the real purpose of Congress 
could exist, it must be effectively put at rest by an 
examination of the history of the passage of this 
measure.” 

Undoubtedly the statute is to be taken as a whole 
and the different sections read together, but I fail 
to see how this helps out the matter. By the first 
section it is prescribed that all charges for any 
service rendered or to be rendered by carriers sub¬ 
ject to the act in the transportation of passengers 
or property shall be just and reasonable, and every 
unjust and unreasonable charge is prohibited and 
declared unlawful. This does no more than enact 
the common into the federal law, and neither adds 
to nor detracts from the rights of such carriers, 
except as it inferentially recognizes their right to a 
just and properly remunerative rate, in prohibiting 
an unjust and unreasonable one. But how does this 
assist the Commission in any given case whether to 
enforce or relieve the carrier from the greater short 
than long haul charge prohibited by the first part 
of the section in question, or what direction or 
guide to that end does it afford? No doubt it in¬ 
sures to the carrier that the short-haul charge shall 


468 CASES BROUGHT IN THE COMMERCE COURT. 

be reasonably remunerative where it has not been 
voluntarily abandoned, although the Commission in 
the order made has entirely disregarded this. But 
that is only half of the problem to be solved, if, 
indeed, it is that much. The point is that it affords 
no guide in determining when a disparity between 
the short and the long haul shall be permissible, 
which is the question which in each case is to be de¬ 
cided by the Commission. But it is further said 
that at this juncture the third section comes in, and 
authorizes a less charge for a long than for a short 
haul, provided an undue or unreasonable prefer¬ 
ence or advantage does not result to any person or 
locality over any other. But this provision of the 
statute is not permissive, but prohibitive. It for¬ 
bids in brief any undue discrimination, as the first 
forbids unjust or unreasonable rates, or the fourth 
the particular kind of discrimination against which 
it is leveled. It may be, correlatively or by infer¬ 
ence, that a right to discriminate is recognized 
when it can be done without injustice or prejudice. 
But how again does this afford a guide to the Com¬ 
mission in determining when a greater short than 
long haul charge shall be sanctioned? The fourth 
section in express terms declares that except as 
extenuated by the action of the Commission a 
greater short than long haul charge is per se a dis¬ 
crimination and advantage which is unjust and 
undue, and not to be tolerated. And how is it pos¬ 
sible, then, to say that a prohibition against what 
is undue furnishes a guide or rule in determining 


CASES BROUGHT IN THE COMMERCE COURT. 469 

when it shall result that that which so on its face 
is to be regarded as undue shall no longer be so? 
There shall be no undue discrimination, says the 
third section. A greater short than long haul 
charge is an undue discrimination, says the fourth. 
At what, then, do you arrive by combining the one 
with the other ? Or where is here to be found the 
criterion or standard which is to enable the Com¬ 
mission to say when and under what circumstances 
that which it is bound otherwise to say is an unjust 
and undue preference or advantage of one locality 
over another is not so ? All the guide there is, is its 
say-so. But if it rests merely on that the enactment 
is confessedly void, and the action of the Commission 
has nothing to sustain it. And that is the only con¬ 
clusion wdiich I can reach with regard to it. It is 
held good by the court for the reasons given by the 
Commission, but to this I can not agree, and feel 
compelled in consequence to give expression to the 
view^s which I entertain to the contrary. There are 
at least such grave doubts with regard to the va¬ 
lidity of the section that the question might well be 
passed by at this time, there being other grounds 
upon which the invalidity of the action of the Com¬ 
mission may be rested. 

For there can be no reasonable doubt that, assum ¬ 
ing that the fourth section is valid, the orders of the 
Commission go far beyond the power conferred by 
it. The authority given by the proviso is upon 
application of the carrier in special cases after in¬ 
vestigation to permit the charging of less for longer 


470 CASES BROUGHT IN THE COMMERCE COURT. 

than for shorter distances, the Commission having 
the right from time to time to prescribe the extent 
to which the carrier may be relieved from the abso- 
lute prohibition against this, which is otherwise 
imposed upon it. There must thus in each instance 
be an application by a carrier, and a special case 
which entitles the carrier to relief—whatever that 
may mean—must be set up and made out. And this 
fixes the limits of the Commission’s authority. Its 
duty is to investigate what is so brought before it, 
and, if a case warranting it appears, to approve the 
application; or if not, to refuse it. The Commission 
can not go on if it does not approve and make rates, 
or lay down rules by which they shall be made, upon 
its own initiative. The carrier in making appli¬ 
cation for approval does not submit or subject itself 
to any such exaction. The right to inaugurate to 
this extent still remains with the carrier the same 
as before the amendment. The authority assumed 
by the Commission here is not to be implied from 
the right to prescribe the extent to which from 
time to time the carrier may be relieved, in the 
words of the statute. This refers to the special 
case in each instance which the carrier is required 
to make out in order to get the approval of the 
Commission, and is necessarily confined to it. In 
this respect the phraseology of the section is not 
changed, and it never by any previous construction 
was carried outside of this, nor is there anything* 
now which requires it. It may be that the appli- 


CASES BROUGHT IN THE COMMERCE COURT. 471 

cations made by the carriers here for the approval 
of existing long and short haul tariffs, blanketing 
the country, went beyond the statute. But if that 
was the case, the proper course to pursue was to 
throw them out upon that ground. The mere fact 
that they were in this form gave the Commission no 
authority to go on and prescribe rates by the whole¬ 
sale. The orders in controversy extend to the en¬ 
tire continent from east to west, saving only a com¬ 
paratively small section in the southeast, which is 
reserved for subsequent consideration. This can 
not by the broadest construction of the law be 
brought within it. By no device can the whole 
United States be made a “ special case nor can 
the Commission, upon any just conception of its 
powers, lay down a hard and fast rule which shall 
apply to every long and short haul case wherever 
originating or whatever its destination from east 
to west across the country. Nor is this saved by the 
establishment of zones with varying percentages. 
As pointed out in the opinion of the court, this 
entirely disregards the right of the carriers to have 
considered what in each instance is a reasonable 
rate between points involved. It also overrides 
the established right of the carriers to make a less 
than reasonable rate to and from competitive points 
from whatever cause that competition arises. And 
it is an attempt to overcome the advantages pos¬ 
sessed by coast over inland cities in the face of what 
nature has provided. All this is fully discussed in 


472 OASES BROUGHT IN THE COMMERCE COURT. 

the opinion of the court, in which I fully concur, 
and to which I can add nothing of consequence. 
For these reasons, without regard to any others, the 
orders of the Commission were clearly invalid, and 
an injunction against them is properly to be 
granted, the motion to dismiss being necessarily 
overruled as the consequence. But I can not see 
my way to go beyond this and declare the fourth 
section valid, on which, if anything is to be said, my 
opinion is to the contrary. 


United States Commerce Court. 


No. 54.— April Session, 1912. 


Anaconda Copper Mining Co. and Boston & 
Montana Consolidated Copper and Silver Mining 
Co., petitioners, 

v. 

United States of America, Respondent, Inter- 
state Commerce Commission and Pittsburgh & 
Lake Erie Railroad Co., et al., interveners. 


ON MOTIONS TO DISMISS. 

Mr. William A. Glasgow, jr., and Mr. Charles D. 
Drayton, with whom Mr. James M. Beck and Mr. C. F. 
Kelley were on the brief, for the petitioners. 

Mr. Winfred T. Denison, Assistant Attorney Gen¬ 
eral, with whom Mr. Thurlow M. Gordon, special 
assistant to the Attorney General, was on the brief, 
for the United States. 

Mr. P. J. Farrell for the Interstate Commerce 
Commission. 

Mr. George Stuart Patterson and Mr. Frederic D. 
McKenney, with whom Mr. Ora E. Butterfield, Mr. W. 
Ainsivorth Parker, and Mr. R. Walton Moore were on 
the brief, for the intervening carriers. 

Before Knapp, Presiding Judge, and Archbald, 
Hunt, Carland, and Mack, Judges. 


473 





474 CASES BROUGHT IN THE COMMERCE COURT, 

[June 7, 1912.] 

Garland, Judge: 

Petitioners are corporations engaged respectively 
at Anaconda and Black Eagle, in the State of Mon¬ 
tana, in smelting ores containing copper, silver, and 
gold. On April 21, and March 11, 1909, they filed 
with the Interstate Commerce Commission nine sep¬ 
arate petitions against certain carriers by railroad 
wherein it was prayed that the Commission grant an 
order compelling said carriers to cease and desist 
from charging petitioners and other shippers of coke 
over their lines of road from points in the State of 
West Virginia to Chicago and South Chicago, in the 
State of Illinois, 30 cents per hundred pounds in 
excess of the amount charged to other persons and 
corporations shipping coke contemporaneously be¬ 
tween the same points, intended for use in smelting 
iron from the ores, and also that the petitioners be 
awarded reparation. Such proceedings were there¬ 
after had in the matter of said petitions that on De¬ 
cember 12, 1910, the Commission made its report and 
order dismissing the same. 

The Commission found that the carriers had tariffs 
in accordance with which they charged, from the 
ovens in West Virginia and Pennsylvania to Chicago 
and certain Chicago points, a rate of $2.35 per net 
ton on coke when used for smelting iron from the 
ores; that said carriers in their tariffs charged for the 
transportation of coke between the points named, 
when used for other purposes than the smelting of 
iron from the ores, a rate of $2.65 per net ton; that 
the rates assessed upon the shipments shown to have 


CASES BROUGHT IN THE COMMERCE COURT. 475 

been made by the petitioners were the separately 
established or joint through rates from the West Vir- 
ginia-Pennsylvania ovens to Chicago, plus the rates 
beyond to Anaconda and Black Eagle, Montana. 
At no time during the period that said shipments 
were made was there a joint through rate on coke 
by way of Chicago from the West Virginia-Pennsyl- 
vania ovens to either of these destinations; that, 
while some shipments were made to Montana direct, 
most of the coke moved from the ovens to Chicago, 
where it was reconsigned to the complainants. In 
either case the method of assessing and paying the 
freight charges was identical; that is, the coke rate 
from the ovens to Chicago was carried forward and 
paid at destination as advanced charges, and that 
it was improper for carriers to base their charges 
upon the use to which a commodity may be put. 

The Commission further found, upon the question 
of reparation, as follows: 

“The question remains to be determined whether 
the complainants are entitled to reparation, regard¬ 
less of whether the $2.65 rate was or is unjust or un¬ 
reasonable in and of itself. The complainants con¬ 
tend that it is illegal, unlawful, and contrary to the 
act for said defendants to charge a different or greater 
rate for transporting coke based upon its use, and that 
the $2.65 rate was unjust, unreasonable, and dis¬ 
criminatory. They offered no evidence whatever to 
show or prove that the $2.65 rate was in and of itself 
unjust, unreasonable, or discriminatory, save what 
appeared on the face of the tariffs, and left the unjust- 


476 CASES BROUGHT IN THE COMMERCE COURT. 

ness, the unreasonableness, and discrimination to be 
deduced or inferred as a matter of law. The freight- 
traffic managers of the defendants testified that the 
$2.35 rate was a very low rate, and that the $2.65 
rate was a just and reasonable rate for the service 
performed and was not in any manner excessive. 
The average distance from the ovens to Chicago by 
the lines of the defendants is about 575 miles, and the 
$2.65 rate yields an average revenue of 4.6 mills per 
ton-mile. 

“ Since July, 1903, the open rate on coke over all 
lines from the ovens in Pennsylvania and West Vir¬ 
ginia to Chicago has been $2.65 per net ton. This 
rate has been, and is, the basing rate from said points 
of origin to Chicago, and for all territory, both east 
and west thereof, and has been paid by all consumers 
of foundry and other than furnace coke continuously 
during the past seven years, and no complaint has 
ever been made against it until these proceedings were 
instituted for reparation. The lower rate of $2.35 
per net ton for use in blast furnaces for smelting iron 
from the ores was a tariff reduction, effective not 
earlier than July, 1905, and has been applied only to 
Chicago and vicinity, and is a very low rate for the 
service performed, and in and of itself is not deemed 
conclusive evidence of the unjustness or unreason¬ 
ableness of the $2.65 rate. 

“ Copper and iron can not fairly be said to compete 
with each other in view of the fact that iron sells for 
less than $20 per ton and copper for anything between 
$200 and $500 per ton. There is no pretense in this 


CASES BROUGHT IN THE COMMERCE COURT. 477 

case that the complainants were engaged in smelting 
iron from its ores. The allegation in some of the 
petitions, that the complainants were engaged in 
smelting ores containing copper, silver, gold, and iron, 
does not place them under the terms of the tariffs 
providing for the rate oh blast-furnace coke, and no 
effort was made on the part of the complainants to 
show that they ever actually smelted iron from its 
ores. 

“ In view of all the facts and circumstances in 
these cases, we are not convinced that the rate of 
$2.65 per net ton charged the complainants was either 
unjust or unreasonable for the services rendered by 
the defendants.” 

Petitioners have brought this case for the pur¬ 
pose of having annulled and set aside the order of 
the Commission dismissing the petitions in the above- 
mentioned cases. A motion to dismiss the petition 
in this case has been filed by respondent and by each 
of the intervening respondents. The grounds upon 
which said motion to dismiss is based, speaking gen¬ 
erally, are: Want of jurisdiction of the Commerce 
Court in the premises, and the failure of the peti¬ 
tion herein to state a cause of action. Counsel for 
petitioners claim in this court, as they did before the 
Commission, that when it appears that there was 
one rate of $2.35 per net ton on coke from West 
Virginia-Pennsylvania ovens to Chicago when the 
coke was to be used in smelting iron from the ores, 
and another rate of $2.65 per net ton between the 
same points on coke to be used for other purposes 


478 CASES BROUGHT IN THE COMMERCE COURT. 

than the smelting of iron from the ores, it clearly fol¬ 
lows as a matter of law that the $2.65 rate is unlawful 
unreasonable, and unjust, and that petitioners were 
entitled before the Commission to have an award 
based upon their shipments of the difference between 
the two rates, the petitioners having paid the higher 
rate. 

The Commission having refused to sustain this 
claim of the petitioners, they now urge that the order 
of the Commission dismissing their petitions was 
illegal by reason of a mistake in law, and that this 
court may correct the same by setting aside the 
order of dismissal. 

We do not think that we are called upon to decide 
what the law would be if applied to a case where there 
was no finding by the Commission as to the unrea¬ 
sonableness of either rate, for the reason that as ap¬ 
pears from the report of the Commission there was 
evidence introduced by the carriers and otherwise 
appearing in the case as to the reasonableness of the 
$2.65 rate, and the Commission in the exercise of a 
power clearly vested in it by law, having found that 
the $2.65 rate was not unreasonable and unjust, we 
are of the opinion that we have no authority nor juris¬ 
diction upon the present record to disturb that find¬ 
ing, and that the Commission having found that said 
rate of $2.65 was not unjust and unreasonable in and 
of itself, we can not say as a matter of law that be¬ 
cause there was a lower rate charged on coke used in 
smelting iron from the ores that the petitioners were 
injured within the meaning of section 8 of the act to 


CASES BROUGHT IN THE COMMERCE COURT. 479 

regulate commerce. (Knudson-Ferguson Fruit Co. v. 
M. C. R. Co., 148 Fed., 968; Parsons v. C. & N. W. 
Ry. Co.y 167 U. S., 447; E . Lauer & Son v. Southern 
Pacific Co., 18 I. C. C., 109; Bash Fertilizer Co. v. 
Wabash R. Co., 18 I. C. C., 522; Copper Queen Con¬ 
solidated Mining Co. v. B. & 0. R. R., 18 I. C. C., 
154; Anaconda Copper Mining Co. v. Chicago & 
Erie R. R. et at., 19 I. C. C., 592; International Salt 
Co. v. Penn. R. Co ., 20 I. C. C., 539; Carter White 
Lead Co. v. Norfolk & Western R. Co., 21 I. C. C., 41; 
M. A. Kennedy & Co. v. St. L. & S. W. Ry. Co., 22 
I. C. C., 277.) 

It further affirmatively appears in the record that 
petitioners as to shipments of coke were not in com¬ 
petition with persons or corporations to whom the 
lower rate was charged, and this fact was considered 
a bar to a recovery in the following cases: Mitchell 
Coal & Coke Co. v. Pennsylvania R. Co. (181 Fed., 
403), Charles H. Lilly Co. v. N. P. R. (117 Pac. Rep., 
401). 

Upon the question of jurisdiction we see no reason 
for departing from our ruling in the cases of Thompson 
Lumber Co. v. Interstate Commerce Commission et al. 
(193 Fed., 682), and Russe & Burgess v. Interstate 
Commerce Commission et al. (193 Fed., 678). 

Upon the facts in the record we think we must dismiss 
the petition of the petitioners filed in this court, and it 
is so ordered. 




. 


















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• 




















United States Commerce Court. 


No. 55.— April Session, 1912. 


Crane Iron Works, petitioner, 

v. 

United States, respondent, Interstate Com¬ 
merce Commission et al., interveners. 


on motions to dismiss. 

For opinions of Interstate Commerce Commission 
see 15 I. C. C. Rep., 248, and 17 I. C. C. Rep., 514. 

Mr. William A. Glasgow, jr., and Mr. Cyrus G. Derr, 
with whom Mr. Charles F. Diggs was on the brief, for 
the petitioner. 

Mr. Winfred T. Denison, Assistant Attorney General, 
with whom Mr. Thvrlow M. Gordon, special assistant 
to the Attorney General, was on the brief, for the 
United States. 

Mr. P. J . Farrell for the Interstate Commerce Com¬ 
mission. 

Mr. Jackson F. Reynolds for the Central Railroad 
Company of New Jersey, intervener. 

Before Knapp, Presiding Judge, and Archbald, 
Carland, and Mack, Judges. 

48250—S. Doc. 789, 62-2-31 


48 ] 





482 CASES BROUGHT IN THE COMMERCE COURT. 

[June 7, 1912.] 

Knapp, Presiding Judge: 

The petitioner in this case, the Crane Iron Works, 
instituted proceedings before the Interstate Com¬ 
merce Commission against the Central Railroad Com¬ 
pany of New Jersey and the Crane Railroad Company 
to procure an order requiring the defendant rail¬ 
roads to establish through routes and joint rates on 
certain commodities between points on the Crane 
Railroad and points in the State of New Jersey on 
the lines of the Central Railroad; and also for repara¬ 
tion on account of previous shipments. After full 
hearing the Commission made a report (17 I. C. C. 
Rep., 514) to the effect that petitioner was not 
entitled to the relief sought, and thereupon entered 
an order dismissing the proceedings. 

Thereafter this suit was brought to set aside and 
annul the Commission’s order of dismissal on grounds 
which will be hereafter stated. The United States 
filed a motion to dismiss on the ground that the peti¬ 
tion did not state a cause of action, and a like motion 
to dismiss was filed by the Commission which had 
intervened. On these motions the case has been 
argued and submitted. 

There had been a previous application to the Com¬ 
mission for the same purpose by the Crane Railroad 
Company, which the Commission also dismissed, as 
appears by its report and order therein (15 I. C. C. 
Rep., 248). Both reports are attached to and made 
a part of the petition now before us, and from these 



CASES BROUGHT IN THE COMMERCE COURT. 483 

reports and the petition itself the following facts 
appear: 

The petitioner is a corporation organized under 
the laws of Pennsylvania and located in the borough 
of Catasauqua, in that State. It was incorporated 
about the year 1895 for the purpose of acquiring 
the plant and property of the Crane Iron Company, 
which had for many years carried on the business 
denoted by its name. At that time the plant con¬ 
sisted of three blast furnaces, together with appurte¬ 
nant buildings, storage bins, etc., and a private 
railroad connected with the works. It does not 
appear when this railroad was constructed or when 
it was extended to connect with exchange tracks of 
the Central Railroad and other long-line carriers; 
but it does appear to have been in use for the purposes 
of the iron plant for more than thirty years. 

In the operation of this plant it is necessary to 
transport loaded cars received by rail to various points 
within the limits of the plant for unloading, to trans¬ 
port cars which have been loaded with its product 
from various points within the plant to the line of 
railway by which they are taken to destination, and 
also to some extent necessary to move cars from 
point to point within the plant itself. For these pur¬ 
poses the iron works long ago laid down rails ex¬ 
tending from a connection with the Central Railroad 
to the various points within its plant where cars were 
to be placed. The line of the Central Railroad ex¬ 
tends through the premises of the iron works and the 


484 CASES BROUGHT IN THE COMMERCE COURT. 

point where the two railroads connect is now and 
always has been upon the iron works’ land. The iron 
works also provided the necessary locomotives for 
operating the various tracks which it had built to 
accommodate the needs of its plant. In actual 
operation loaded cars destined for the iron works 
were placed by the Central Railroad upon a track 
known as the exchange track, from which they were 
taken by the locomotives of the iron works and 
hauled to the required point within its plant. When 
cars were loaded for movement out they were taken 
by the same locomotives and placed upon the ex¬ 
change track, where the Central Railroad received 
and transported them to destination. These loco¬ 
motives were also used for moving cars from point 
to point within the plant as might be desired. 

For this service the petitioner has never received 
and, until the organization of the Crane Railroad, 
had never claimed that it should receive compensa¬ 
tion from the Central Railroad. Indeed, it seems to 
have been assumed that these tracks and engines 
were a necessary part of the plant of the iron works 
whose business could not be properly carried on 
without them. 

In process of time a few other industries, perhaps 
half a dozen, were located in close proximity to the 
premises of the iron works, though not upon its 
land, and these industries were so situated that 
loaded cars could be transported between the tracks 
of the Central Railroad and the industry only over 
the rails of the Crane Iron Works. For the purpose 


CASES BROUGHT IN THE COMMERCE COURT. 485 

of serving these industries, the Crane Iron Works 
extended its rails beyond its own land to these sev¬ 
eral plants. Cars for these industries were placed 
upon the same track with those intended for the 
iron works and taken by the locomotives of the iron 
works over the rails of that company to the several 
industries. For this service the iron works made a 
charge to the industry which seems to have been 
usually two dollars a car. The different railroads 
bringing these cars to Catasauqua, including the 
Central Railroad, paid to the iron works towards 
defraying this charge at first five -cents and subse¬ 
quently six cents per ton. This condition seems to 
have continued for many years, during which time, 
as above stated, the iron works neither claimed nor 
received any compensation for handling its own 
freight. 

Under the statutes of Pennsylvania a private 
railroad cannot connect with a public railroad 
except for handling the business of the owners of 
the private railroad, and the iron works was advised 
that it had no lawful right to perform this switching 
service for the other industries. Accordingly, in 
1905, the Crane Railroad Company was incorporated, 
and the tracks and other property used by the iron 
works in connection with its railroad were conveyed 
to the Crane Railroad Company, together with a 
strip of land ten feet wide wherever its rails were 
laid upon the land of the iron works and also what¬ 
ever rights of way it might have in reaching the other 
industries in question. The capital stock of both 


486 CASES BROUGHT IN THE COMMERCE COURT. 

the Crane Iron Works and the Crane Railroad Com¬ 
pany is owned by the Empire Iron & Steel Company, 
and the management of the Crane Railroad Company 
after the incorporation continued in the same manner 
as before, although the operating accounts of the 
two companies were kept entirely separate. 

Although the Crane Railroad Company was organ¬ 
ized in 1905 it did not begin business on its own 
account until the following year, since which time 
it has charged both to the other industries and to 
the Crane Iron Works two dollars per car for this 
switching service,’ and it is insisted that the various 
railroads entering Catasauqua should absorb this 
switching charge. The Central Railroad has de¬ 
clined to make any allowance on account of cars 
handled for the Crane Iron Works, but has made an 
allowance of six cents per ton on traffic consigned 
to or from the other industries. 

The principal contention of petitioner appears to be 
that the Crane Railroad Company is a common car¬ 
rier subject to the provisions of the act to regulate 
commerce and the jurisdiction of the Commission; 
that this was conclusively established by the evidence 
before the Commission; that the Commission, in failing 
to’ find the fact accordingly and leaving it undeter¬ 
mined, committed an error of law; that as such com¬ 
mon carrier the Crane Railroad Company is legally 
entitled to compensation for the transportation serv¬ 
ice which it is alleged to perform for petitioner; and 
that therefore it was error of law for the Commission 
to refuse the relief w T hich the petitioner sought to 


CASES BROUGHT IN THE COMMERCE COURT. 487 

secure. Incidentally, and in support of the main con¬ 
tention, it is further claimed that the dismissal order 
was erroneous because the undisputed evidence 
established as matter of law unjust discrimination on 
the part of the Central Railroad of New Jersey, in 
that it pays the Crane Railroad, out of the tariff 
charge which it collects, for transporting cars to and 
from the other industries located on the tracks of the 
Crane Railroad, but refuses to pay anything for 
transporting cars to or from the Crane Iron Works. 

The Crane Railroad Company is organized under 
the railroad law of Pennsylvania; which, among other 
things, declares that all railroads so organized shall be 
common carriers. In that State it has undoubtedly 
the legal status of a common carrier, with such privi¬ 
leges and obligations as pertain to railroad cor¬ 
porations in Pennsylvania. It is not necessary to 
discuss whether the Crane Railroad is in fact a 
common carrier within the meaning of that term as 
used in the act to regulate commerce, because we shall 
assume for the purposes of this case that it is a com¬ 
mon carrier subject to the act, and the matters in 
dispute will be decided on that assumption. 

But granting all that is claimed in this regard, it 
does not follow, as we think, that petitioner is there¬ 
fore entitled to have joint rates established, or that 
the dismissal order of the Commission is for any rea¬ 
son unlawful. The substantive basis of petitioner's 
contention is the following provision in the first sec¬ 
tion of the act: “And it shall be the duty of every 
carrier subject to the provisions of this act * * * 


488 CASES BROUGHT IN THE COMMERCE COURT. 

to establish through routes and just and reasonable 
rates applicable thereto.” It will be observed that 
the obligation to establish “joint rates” is not im¬ 
posed, but only the obligation to establish “ through 
routes,” with just and reasonable rates applicable 
thereto. Undoubtedly, connecting carriers are re¬ 
quired to facilitate the movement of traffic by pro¬ 
viding through routes, but the application of joint 
rates to such routes is not obligatory except as 
required by the Commission after notice and hearing. 
If through routes are voluntarily established the rates 
fixed for transportation over such routes are subject 
to the regulating power of the Commission; and the 
Commission may require joint rates to be provided, 
fixing the amount thereof and the divisions between 
the several carriers when they are unable to agree 
among themselves. 

If the Crane Railroad be regarded as performing 
the service of a public carrier, a service which the 
shipper is not required to provide, and not a private 
service which the shipper must furnish at its own 
expense, we see no reason to doubt upon the facts 
now disclosed that through routes in this case have 
been provided and are in full operation. All the 
facilities of interchange and through movement are 
in current use, and traffic in fact moves freely from 
points on one road to points on the other. Indeed, 
we do not perceive that anything more or different 
could be done by either road to bring about the phys¬ 
ical conditions and incidents which constitute through 
routes. 


CASES BROUGHT IN THE COMMERCE COURT. 489 

The authority of the Commission to require joint 
rates is found in a paragraph in the fifteenth section 
of the act, which reads as follows: 

“The Commission may also, after hearing, on a 
complaint or upon its own initiative without com¬ 
plaint, establish through routes and joint classifica¬ 
tions, and may establish joint rates as the maximum 
to be charged and may prescribe the division of such 
rates as hereinbefore provided and the terms and 
conditions under which such through routes shall be 
operated whenever the carriers themselves shall 
have refused or neglected to establish voluntarily 
such through routes or joint classifications or joint 
rates; and this provision shall apply when one of 
the connecting carriers is a water line.” 

That this invests the Commission with discre¬ 
tionary power, and was so intended, can not be seri¬ 
ously doubted. Not only is the grant of authority 
permissive in form but the entire paragraph con¬ 
templates the exercise of judgment upon the facts 
disclosed, and implies the right and duty of the 
Commission to order or decline to order joint rates, 
as the circumstances and conditions developed in 
each inquiry may seem to require. The provision 
for a hearing upon complaint, or the equivalent 
initiative of the Commission, involves the liberty 
and obligation of the administrative tribunal to 
decide a controversy of this nature upon its merits 
with due regard to the interests of both shippers 
and carriers. In short, it seems clear to us that the 
question of establishing joint rates or declining to 
do so rests in the discretion of the Commission, and 
it is equally clear that the refusal of the Commission 


490 CASES BROUGHT IN THE COMMERCE COURT. 


in this case was a lawful and proper exercise of that 
discretion. 

But the dismissal order in question rests upon an¬ 
other basis, which will be briefly considered. Upon 
all the circumstances connected with the location, 
construction, and operation of the Crane Railroad, 
the Commission found as an ultimate fact that, as to 
the Crane Iron Works, it was a mere plant facility, 
performing services which the iron works should 
perform for itself if it desired such services, and that 
the Central Railroad was under no obligation to pay 
the Crane Railroad for the switching service which it 
performs for the iron works and, indeed, could not 
lawfully do so. We see no reason to doubt the cor¬ 
rectness of this conclusion. The Commission had 
previously pointed out the distinction between those 
operations which constitute a plant facility and the 
legitimate services of a common carrier (General 
Electric Company v. A r . Y. C. & H. R. R. R. Co. et al., 
14 I. C. C. Rep., 237; Solvay Process Company v. D., 
L. & W. R. R. Co., 14 I. C. C. Rep., 246), and the 
observations made in these illustrative cases seem to 
us to express a sound and wholesome principle. That 
there was substantial evidence to sustain the finding 
of the Commission as to the character of the services 
rendered is not open to reasonable question, and, this 
being so, the conclusion must be accepted accordingly. 

But the argument is earnestly pressed that such a 
relation can not as matter of law be predicated of an 
incorporated railroad which is declared to be a 
common carrier by the fundamental law of the State 


CASES BROUGHT IN THE COMMERCE COURT. 491 

of its creation. In other words, it is insisted that 
the Crane Railroad, being in law a common carrier 
and performing the functions of a common carrier, 
can not be a plant facility of the Crane Iron Works, 
but must be regarded as a common carrier for the 
Crane Iron Works, and entitled as a matter of legal 
right to a just share of the transportation charge 
which the Central Railroad makes and collects for 
carrying the traffic of the iron works; and on this 
theory it is argued that the finding and conclusion 
of the Commission involve an error of law which this 
court should correct. 

We are constrained to reject this contention. 
Whether the Crane Railroad is a plant facility as to 
the Crane Iron Works or a common carrier of the 
traffic of that concern must be held to be a question 
of fact which is not affected by the circumstance of 
incorporation. We understand it to be admitted 
that the operations of this railroad when it was owned 
and operated by the iron works were the operations 
of a plant facility. It is contended, however, when 
the railroad was separately incorporated and passed 
from the ownership of the iron works, that its rela¬ 
tion to the latter and the legal character of its serv¬ 
ices became immediately changed. That is to say, 
the mere fact of the separation of ownership and the 
transfer of the title and control of the railroad prop¬ 
erty to a new corporation, although there was not 
the slightest change in what was actually done, 
operated in legal effect to transform a plant facility 
into a common carrier and to impose obligations on 


492 CASES BROUGHT IN THE COMMERCE COURT. 

the Central Railroad, as to the traffic of the iron 
works, which it could not theretofore have been 
required to assume. We can not believe that any 
such result was accomplished. The rights and duties 
of the Central Railroad respecting the iron works 
could not thus be altered. If its obligations as a 
common carrier were fully discharged and its tariff 
rate earned by delivering cars to and taking them 
from the exchange tracks before the iron works 
parted with its railroad, its rights and duties respect¬ 
ing that concern were neither increased nor dimin¬ 
ished by the creation of the Crane Railroad. The 
services rendered to the iron works continuing to be 
precisely the same in point of fact, this railroad con¬ 
tinued to be utilized as the facility of the iron works’ 
plant in the same way after as before incorporation. 

Nor do we perceive any serious objection to regard¬ 
ing a given agency as a plant facility of a particular 
shipper, although a common carrier as to other ship¬ 
pers. Whether considered from the standpoint of 
law or of practical administration, it seems reason¬ 
able to hold, as the Commission virtually held in this 
case, that a railroad of the kind in question may have 
this dual character and perform services for one con¬ 
cern which are not the services of a common carrier, 
but which that concern is bound to provide for 
itself, notwithstanding it occupies the relation of a 
common carrier to other concerns and the public 
generally. Concededly, the work which the Crane 
Railroad does in moving cars between different 
points in the iron works’ plant has none of the inci- 


CASES BROUGHT IN THE COMMERCE COURT. 493 

dents of common carriage, and why may not the 
same thing be affirmed of the work it does in switch¬ 
ing cars for the iron works to and from the ex¬ 
change track with the Central Railroad, even if the 
work it does for the other industries makes it as to 
them or the shippers of Catasauqua a common 
carrier ? 

It is unnecessary to discuss the charge of discrimi¬ 
nation except to say that the Commission has 
found, upon evidence which is clearly substantial, 
that the refusal of the Central Railroad to pay 
switching charges on traffic handled for the Iron 
Works, while at the same time paying switching 
charges on traffic handled for the other industries, 
is not an undue prejudice to the one or an undue 
preference to the others. 

In the concluding paragraph of the report upon 
which the dismissal order is based the Commission 
summarizes the situation as follows: 

“ The complaint attacks certain rates as unreason¬ 
able and asks for the establishment of certain joint 
rates between definite points. The complainant 
[petitioner] does not contend that these rates are 
unreasonable except by the amount of this switching 
charge, nor does it ask for the establishment of joint 
rates except for the purpose of compelling the de¬ 
fendant [Central Railroad] to pay the Crane Rail¬ 
road for the performance of this switching service. 
Since we hold that the delivery by the defendant 
[Central Railroad] is completed when cars are placed 
upon the interchange track and that defendant 
[Central Railroad] owes no duty to the complainant 
[petitioner] to receive loaded cars from it until they 
are put upon that track, there is no occasion to exam¬ 
ine in detail the rates referred to.” 


494 CASES BROUGHT IN THE COMMERCE COURT. 


Upon the whole case we are of opinion that no 
error of law was committed by the Commission in 
denying the petitioner’s application. It follows that 
the motions to dismiss the petition should be granted, 
and it will be so ordered . 


United States Commerce Court. 

No. 57— February Session, 1912. 


United States of America, ex rel. Stony Fork 
Coal Co. et al., petitioners, United States, 

INTERVENER, 

V. 

Louisville & Nashville Railroad Co. et al., 

RESPONDENTS. 


ON PETITION FOR PEREMPTORY WRIT OF MANDAMUS. 

Mr. T. G. Anderson for petitioners. 

Mr. Blackburn Esterline , Special Assistant to the 
Attorney General, for the United States, intervener, 
in support of the jurisdiction of the court. 

Mr. Albert S. Brandeis and Mr. William A. North- 
cutt for the Louisville & Nashville Railroad Co. 

Mr. Alfred P. Thom and Mr. John K. Graves for 
the Southern Railway Co. 

Before Knapp, Presiding Judge, and Archbald, 
Hunt, Carland, and Mack, Judges. 

[March 20,1912.] 

Carland, Judge: 

November 15th, 1911, petitioners filed their peti¬ 
tion in this court, praying for a writ or writs of man¬ 
damus directed to the respondents, commanding 

495 




496 CASES BROUGHT IN THE COMMERCE COURT. 

them and each of them to perform their duties as 
common carriers in the matter of the transportation 
of coal. Upon the filing of the petition an alterna¬ 
tive writ of mandamus was ordered to issue by the 
court. The alternative writ, however, was not issued, 
but in place thereof a copy of the order allowing the 
same was served on the respondents, together with 
an order to show cause, returnable December 5th, 
1911. Each respondent answered the petition filed, 
and the case was subsequently heard upon the peti¬ 
tion and the answers of respondents. 

At the hearing, the Louisville & Nashville Rail¬ 
road Company moved to dismiss the petition for 
want of jurisdiction. Petitioners moved for judg¬ 
ment on the pleadings. The following material facts 
appear therefrom: 

The Stony Fork Coal Company, Ralston Coal Com¬ 
pany, Monarch Coal & Coke Company, and Hignite 
Coal Mining Company own and operate coal mines in 
Bell County, Kentucky. The Louisville & Nashville 
Railroad Company and the Southern Railway Com¬ 
pany are common carriers engaged in the transporta¬ 
tion of freight, including coal, from coal fields and 
coal mines on their lines of railroad in the State of 
Kentucky to stations and points in the States of 
Tennessee, North Carolina, South Carolina, Georgia, 
Alabama, Florida, and Mississippi, which said last- 
mentioned States are known for the purposes of trans¬ 
portation as southeastern territory. 

Middlesborough is a town in Bell County, Kentucky, 
in what is known as the Middlesborough district of 


CASES BROUGHT IN THE COMMERCE COURT. 497 

the bituminous coal fields of southeastern Kentucky. 
The Stony Fork Coal Company owns and operates a 
coal mine about nine miles west of Middlesborough 
at a station or point known as Stony Fork. The 
Ralston Coal Company owns and operates a coal 
mine about eight miles west of Middlesborough at a 
station or point known as Capito. The Monarch 
Coal & Coke Company owns and operates a coal mine 
about seven miles west of Middlesborough at a sta¬ 
tion or point known as Wilmont. The Hignite Coal 
Mining Company owns and operates a coal mine 
about eight miles west of Middlesborough at a sta¬ 
tion or point known as Covert. 

Eighty per cent of the total output of said mines 
is sold in southeastern territory. Each respondent 
operates a line of railroad from Middlesborough to 
said territory. The route to the said southeastern 
territory over the line of the Louisville & Nashville 
Railroad from the petitioners’ coal mines is so long 
and circuitous that said railroad company can not 
compete in the handling of coal traffic with the 
shorter and direct route via the Southern Railway, 
and publishes no rates over its said route applicable 
to said coal traffic. Said company, however, owns 
and operates a line of railroad commonly known as 
the Middlesborough Railroad, extending from a point 
at or near its Middlesborough depot to Stony Fork 
Junction, a distance of about 2.98 miles, and from 
said junction up the Stony Fork of Yellow Creek, a 
distance of about 7.83 miles, this line being known as 
the Stony Fork Branch. The Southern Railway has 

48250—S. Doc. 789, 62-2-32 


498 CASES BROUGHT IN THE COMMERCE COURT. 

the right by contract to use the Stony Fork Branch 
line jointly with the Louisville & Nashville Railroad. 
The stations or points where the petitioners’ mines 
are located are situated on said Stony Fork Branch, 
and are designated as points of origin in the tariffs 
hereinafter mentioned. The Louisville & Nashville 
Railroad Company has from time to time published 
joint and concurrent tariffs and duly filed the same 
with the Interstate Commerce Commission as pre¬ 
scribed by law, establishing through routes and joint 
rates on coal from said stations or points on the Stony 
Fork Branch, viz, Stony Fork, Capito, Wilmont, and 
Covert, to stations or points in the various other 
States mentioned and designated as southeastern ter¬ 
ritory. Said through route is via the Louisville & 
Nashville Railroad to Middlesborough, and thence via 
Southern Railway to points of destination; said joint 
tariff being only applicable to such through route. 
The Southern Railway Company has duly published 
and filed with the Interstate Commerce Commission, 
Southern Railway Company coal tariff 8-ICC-A-4500, 
effective October 15th, 1911, in which said tariff the 
Louisville & Nashville Railroad Company is named 
as a participating carrier, and in which said last- 
named carrier has concurred according to law. Said 
Southern Railway tariff 8-ICC-A-4500 names the 
points or stations where petitioners’ mines are located 
as points of origin for the shipment of coal, and said 
tariff advertises to the world that said Southern Rail¬ 
way will transport coal from said points of origin to 
southeastern territory for the rates therein mentioned. 


CASES BROUGHT IN THE COMMERCE COURT. 499 

The Southern Railway Company contends that it 
is under no obligation as a common carrier or other¬ 
wise to furnish transportation at the points of origin 
mentioned, or with respect to shipments over the 
Stony Fork Branch to Middlesborough, because it is 
not the initial carrier, and admits that it has not 
furnished and will not furnish cars to the petitioners 
at such points unless compelled to do so by competent 
authority. The Louisville & Nashville Railroad does 
not acknowledge any legal or moral obligation to fur¬ 
nish cars or transportation to the petitioners for the 
shipment of coal from the points above mentioned 
to southeastern territory for the reason that it only 
performs a switching service for the Southern Rail¬ 
way in transporting coal from said points of origin 
to Middlesborough, and refuses to transport the coal 
of petitioners further than to Middlesborough. By 
reason of this dispute between the carriers the peti¬ 
tioners are deprived of the means of transporting 
their coal to the southeastern territory, and their 
business is destroyed save for a comparatively small 
amount of local shipments to local Kentucky points. 

Petitioners have repeatedly requested respondents 
to transport their coal to southeastern territory, but 
said requests have been continually refused, and by 
reason thereof petitioners have been obliged to cancel 
all orders for coal from said territory, and are now 
excluded from the systems of both respondents and 
placed in the position with respect to said southeast¬ 
ern territory of being on no railroad line whatever, 


500 CASES BROUGHT IN THE COMMERCE COURT. 

instead of having the use and benefit of two railroads, 
or at least one. 

It is alleged in the petition that respondents are, 
and each of them is, receiving freight, including coals, 
and transporting the same from all other stations and 
points and for all other shippers and mines in Bell 
County, Kentucky, to said southeastern territory. 
For the purpose of petitioners 7 case it is not necessary 
that said allegations be wholly established. We think 
it sufficient to show discrimination if it appears that 
respondents are transporting coal of other shippers 
from practically the same territory at the same rates 
to southeastern territory, and at the same time are 
refusing to transport the coal of petitioners. 

It is true that the foregoing allegation is denied in 
the answers of respondents, but we think the denial, 
so far as the transportation of coal is concerned, is 
destroyed by the fact that it appears from the admis¬ 
sions in the answers that both respondents are ship¬ 
ping coal from other mines in Bell County to the 
southeastern territory. Especially is this true when 
it appears from the record that respondents are oper¬ 
ating jointly the line of road known as Bennett’s Fork 
Branch, running up Bennett’s Fork of Yellow Creek 
from Stony Fork Junction. 

Briefly stated, the case made by the petitioners is 
this: They own and operate coal mines located upon 
the line of the Louisville & Nashville Railroad, known 
as the Middlesborough Railroad, which extends to 
Middlesborough, Ky. The Southern Railway Com¬ 
pany owns a line of road running from Middlesborough 


CASES BROUGHT IN THE COMMERCE COURT. 501 

to the so-called southeastern territory, and has the 
right to operate the Stony Fork Branch of the Mid- 
dlesborough Railroad. The Southern Railway has 
filed with the Interstate Commerce Commission and 
published according to law a joint tariff and estab¬ 
lished through routes from the points on the Middles- 
borough road, where petitioners’ mines are located, 
to southeastern territory. The Louisville & Nashville 
Railroad has concurred in the tariff and through route 
established by the Southern Railway, and is named 
in said tariff as a participating carrier. Said carriers 
transport coal from other mines and for other ship¬ 
pers in Bell County, located in practically the same 
territory as those of the petitioners, to southeastern 
territory. 

In this condition of affairs the Louisville & Nash¬ 
ville Railroad refuses to move and transport the 
coals of the petitioners to southeastern territory 
for the reason that in connection with the traffic 
mentioned it simply performs a switching service, 
and that it is not its duty to furnish cars for any 
greater distance than to transport the coal to Mid- 
dlesborough. The Southern Railway Company re¬ 
fuses to transport the coals of petitioners for the 
reason that it is not the initial carrier and therefore 
is not obligated to send its cars up to the points 
where are located the petitioners’ mines to there 
receive the coal, and that its whole duty is per¬ 
formed when it furnishes the cars at Middlesborough. 

But the petitioners are not interested in this dis¬ 
pute between the carriers except in so far as it pre- 


502 CASES BROUGHT IN THE COMMERCE COURT. 

vents them from having their coal transported, and 
only ask that these common carriers, having estab¬ 
lished through routes and joint rates from petitioners’ 
mines to southeastern territory, shall perform their 
duty as such common carriers and move the coals of 
the petitioners in interstate commerce. 

This court has no jurisdiction to consider the 
question of car distribution in advance of some 
action by the Interstate Commerce Commission, or 
to determine how many cars the Southern Railway 
shall furnish, or how many the Louisville & Nash¬ 
ville Railroad shall furnish, for the transportation of 
the petitioners’ coal. It is believed, however, that 
this court has the undoubted jurisdiction upon the 
facts presented by the record to issue a writ or 
writs of mandamus directed to these common car¬ 
riers, commanding them that so long as they estab¬ 
lish and maintain through routes and joint rates to 
southeastern territory they shall move and transport 
in interstate commerce the coals of the petitioners 
when tendered in such reasonable quantities as may 
be determined either by agreement with the carriers 
or by the Interstate Commerce Commission if they 
can not agree. 

We will now consider the objections made to our 
jurisdiction to grant any relief under the facts stated, 
and also as to what relief shall be granted if we have 
jurisdiction. 

At the inception of this case the Attorney General 
of the United States did not take part therein. Sub¬ 
sequently he was allowed to intervene in behalf of the 


CASES BROUGHT IX THE COMMERCE COURT. 503 

petitioners. If there was an allegation of the peti¬ 
tioners that the application was now made by the 
Attorney General for a writ or writs of mandamus 
against the respondents at the request of the Inter¬ 
state Commerce Commission, we would have authority 
to grant such writ or writs if the facts should warrant 
us in so doing, under section 20 of the act to regulate 
commerce. This section only requires proof of a 
violation of some provision of said act. 

In the absence, however, of any showing that the 
application is now made by the Attorney General at 
the request of the Interstate Commerce Commission, 
we must act, if at all, under section 23 of the act. By 
subdivision 4, of section 1, of the act creating this 
court, we are given jurisdiction of “ all such mandamus 
proceedings as under the provisions of section 20 or 
section 23 of the act entitled, ‘ An act to regulate 
commerce/ approved February 4th, 1887, as amended, 
are authorized to be maintained in the Circuit Court 
of the United States.” 

Section 23 of the act, so far as material, reads as 
follows: “The Circuit and District Courts of the 
United States shall have jurisdiction, upon the rela¬ 
tion of any person or persons, firm or corporation, 
alleging such violation by a common carrier of any 
of the provisions of the act to which this is a supple¬ 
ment, and all acts amendatory thereof, as prevents 
the relator from having interstate traffic moved by 
said common carrier at the same rates as are charged 
or upon terms or conditions as favorable as those 
given by said common carrier for like traffic under 


504 CASES BROUGHT IN THE COMMERCE COURT. 

similar conditions to any other shipper, to issue a 
writ or writs of mandamus against said common car¬ 
rier to move and transport the traffic or to furnish 
cars or other facilities for transportation for the 
party applying for the writ.” This section not only 
requires that there must be some violation of the 
act to regulate commerce, but this violation must 
be one which prevents the relator from having inter¬ 
state traffic moved by said common carrier at the 
same rates as are charged or upon terms and condi¬ 
tions as favorable as those given by said common car¬ 
rier for like traffic under similar conditions to any 
other shipper. In other words, the violation of the 
act to regulate commerce on the part of the carrier 
must be such a violation as will amount to discrim¬ 
ination. 

By section 1 of the act to regulate commerce as 
amended June 18th, 1910, it is provided as follows: 

“The term Transportation 1 shall include cars and 
other vehicles and all instrumentalities and facilities 
of shipment or carriage, irrespective of ownership or 
of any contract, express or implied, for the use 
thereof, and all service in connection with the receipt, 
delivery, elevation, and transfer in transit, ventilation, 
refrigeration or icing, storage, and handling of property 
transported; and it shall be the duty of every carrier 
subject to the provisions of this act to provide and 
furnish such transportation upon* reasonable request 
therefor, and to establish through routes and just and 
reasonable rates applicable thereto, and to provide 
reasonable facilities for operating such through routes, 


CASES BROUGHT IN THE COMMERCE COURT. 505 

and to make reasonable rules and regulations with 
respect to exchange, interchange, and return of cars 
used therein, and for the operation of such through 
routes, and providing for reasonable compensation 
to those entitled thereto.” 

Again, by section 3 of the act it is provided: “ Every 
common carrier subject to the provisions of this act 
shall, according to their respective powers, afford all 
reasonable, proper, and equal facilities for the inter¬ 
change of traffic between their respective lines, and 
for the receiving, forwarding, and delivering of passen¬ 
gers and property to and from their several lines and 
those connecting therewith/’ 

By section 7 of the same act it is also provided: 
“That it shall be unlawful for any common carrier 
subject to the provisions of this act to enter into any 
combination, contract, or agreement, expressed or 
implied, to prevent, by change of time schedule, car¬ 
riage in different cars, or by other means or devices, 
the carriage of freights from being continuous from 
the point of shipment to the place of destination.” 

Considering the above provisions of the act to 
regulate commerce as applied to the facts in this 
case, it cannot be doubted that the respondents are 
violating some if not all of those provisions. It 
also necessarily follows that such violation is pre¬ 
venting the petitioners from having interstate traffic 
moved by respondents upon terms or conditions as 
favorable as those given by said respondents for like 
traffic under similar conditions to any other shipper. 


506 CASES BROUGHT IN THE COMMERCE COURT. 

It is objected that we may not issue a writ or writs 
of mandamus in this case for the reason that the 
refusal to transport the coals of petitioners at all 
is not such a discrimination as is contemplated by 
the language of section 23; and that in order to come 
within the purview of said section the carrier must 
be actually transporting interstate traffic but not 
upon terms or conditions as favorable to one ship¬ 
per as are given to another shipper for like traffic 
under similar conditions. We believe that this is 
placing too narrow a construction upon said section. 
We believe that if respondents are carrying the coals 
of other shippers from the immediate territory ad¬ 
joining the petitioners’ mines to southeastern terri¬ 
tory, and at the same time are refusing to carry the 
coals of the petitioners at all, they have not only 
violated the provisions of the interstate commerce 
act, but such violation prevents the petitioners from 
having their interstate traffic moved by respondents 
upon terms or conditions as favorable as those 
given by said respondents for like traffic under 
similar conditions to other shippers. 

It would lead to an absurd result if the court 
should be obliged to hold that discrimination might 
exist if respondents were charging other shippers 
fifty cents a ton for the transportation of coal to 
southeastern territory and at the same time were 
charging petitioners one dollar a ton for the same 
service, and yet there would not be discrimination if 
respondents refused to transport the coal of peti¬ 
tioners at all, for any price. 


CASES BROUGHT IN THE COMMERCE COURT. 507 

This court is not now concerned with the arrange¬ 
ments which respondents may make for the trans¬ 
portation of petitioners’ coal as between themselves. 
The determination of the question as to whether the 
Louisville & Nashville Railroad shall transport the 
coal of the petitioners to Middlesborough in cars of 
its own, there to be taken by the Southern Railway 
Company to points of destination in southeastern 
territory, or whether the Southern Railway Company 
shall send its cars from Middlesborough up the Stony 
Fork Branch to be there loaded with the coals of peti¬ 
tioners, and thence transported over the Louisville & 
Nashville Railroad and the Southern Railway to 
points of destination in southeastern territory, or 
whether the Louisville & Nashville Railroad shall 
ship the coals to Middlesborough from points of ori¬ 
gin, there to be changed from the Louisville & Nash¬ 
ville cars to the cars of the Southern Railway, or as 
to the number of cars the Southern Railway Com¬ 
pany may be compelled to furnish to petitioners for 
the transportation of coal, or the number of cars the 
Louisville & Nashville Railroad may be obliged to 
furnish for the same service, nor the number of cars 
at which the mines of the petitioners shall be rated; 
these are questions either for the agreement of re¬ 
spondents between themselves or, failing in this, for 
the administrative action of the Interstate Commerce 
Commission. 

This court is now simply dealing with the plain 
question of law as to whether the respondents, as 
common carriers subject to the provisions of the 


508 CASES BROUGHT IN THE COMMERCE COURT. 

interstate commerce act, may be compelled to per¬ 
form a plain legal duty not involving any discretion 
on the part [of the respondents and in the absence of 
any legal excuse or justification for the respondents 
to refuse to transport in interstate commerce the 
coals of the petitioners. It is insisted, however, by 
counsel for the respondents that by virtue of the 
decisions of the Supreme Court of the United States 
in Texas & Pacific Railway Company v. Abilene Cot¬ 
ton Oil Company , 204 U. S. 426; and Baltimore & 
Ohio Railroad Company v. Pitcairn Coal Company , 
215 U. S. 481, this court is prevented from granting 
any relief of the nature prayed for by the petitioners, 
for the reason that the jurisdiction, if any, to grant 
such relief is with the Interstate Commerce Com¬ 
mission. 

We do not so understand the ruling in the cases 
cited. In the Pitcairn case the Supreme Court, 
after holding that the United States Circuit Court 
could not issue mandamus in the matter of the dis¬ 
tribution of cars, for the reason that this was an 
administrative duty devolving upon the Interstate 
Commerce Commission, said: 

“This conclusion being in reason impossible, it 
must follow that, construing the provisions of sec¬ 
tion 23 in the light of and in harmony with the 
amendments adopted in 1906, the remedy afforded 
by that section, in the cases which it embraces, must 
be limited either to the performance of duties which 
are so plain and so independent of previous adminis¬ 
trative action of the Commission as not to require a 


CASES BROUGHT IN THE COMMERCE COURT. 509 

prerequisite exertion of power by that body, or to com¬ 
pelling the performance of duties which plainly arise 
from the obligatory force which the statute attaches 
to orders of the Commission rendered within the 
lawful scope of its authority until such orders are 
set aside by the Commission or enjoined by the 
courts.” 

We are firmly persuaded that the facts in the case 
at bar clearly bring it within the limitation declared by 
the Supreme Court, the writ of mandamus being issued 
only to compel the performance of a plain legal duty, 
a function which the Interstate Commerce Commis¬ 
sion could not exercise itself, nor could the Commis¬ 
sion take any action that would aid us in the decision 
of the question of law arising on this record. 

It is pertinent in this connection to inquire for 
what purpose did the respondents agree to establish 
a through route from the points of origin mentioned in 
the case at bar to the southeastern territory, and in 
connection therewith file and publish a joint tariff 
over said through route for the transportation of coal. 
It was a clear holding out that such carriers would 
transport the coals of the petitioners over the route 
for the rates mentioned in the joint tariff, and so long 
as they shall maintain the tariff described as 8-ICC- 
A-4500, or a like tariff, the law will compel them to 
transport the coals of the petitioners when tendered 
to them in such reasonable quantities as will enable 
the respondents to handle the same. 

Petitioners desire their coals moved in interstate 
traffic over the route and to the points in southeastern 


510 CASES BROUGHT IN THE COMMERCE COURT. 

territory. They are not primarily concerned with just 
how the handling of this traffic may be arranged be¬ 
tween the Louisville & Nashville Railroad and the 
Southern Railway. They do desire that the re¬ 
spondents shall be compelled to perform their plain 
legal duty and move in interstate commerce their 
coal. The Southern Railway seeks to excuse itself 
from transporting the cars of petitioners by assert¬ 
ing that it is not the initial carrier, and that when 
it filed and published coal tariff 8-ICC-A-4500 it 
was acting as an agent of the Louisville & Nash¬ 
ville Railroad, and did not pretend to say that it 
would transport the coals of petitioner except as a 
connecting carrier. The Louisville & Nashville Rail¬ 
road Company seeks to excuse its refusal to trans¬ 
port the coals of the petitioners on the ground that 
it simply concurred in coal tariff 8-ICC-A-4500 
as a participating carrier, and did not thereby intend 
to agree to transport the coals of the petitioners any 
further than to perform a switching service, as it is 
termed, from the mines in question down to Mid- 
dlesborough. 

But the law as applied to the case overrides this 
dispute between the respondents as to who shall fur¬ 
nish the cars or as to what proportion of cars shall 
be furnished by each, and says to the respondents: 
By your act in establishing a through route and joint 
tariff from points of origin on the Middlesborough 
Railroad, or the Stony Fork branch of the same, to 
the southeastern territory you have placed yourselves 


CASES BROUGHT IN THE COMMERCE COURT. 511 

in a position where you must transport the coals of 
the petitioners to said southeastern territory regard¬ 
less of your private disputes. 

Believing, as we do, that the facts in this case show 
a refusal on the part of respondents to perform their 
plain legal duty in the premises, we are of the opinion 
that the motion to dismiss made by the Louisville & 
Nashville Railroad Company should be denied , and that 
a peremptory writ of mandamus should issue out of this 
court directed to each of said respondents , commanding 
them , their officers , and agents , so long as they maintain 
Southern Railway coal tariff 8-ICC-A-J^500 , or any 
like tariff , to transport the coals of the petitioners from 
the points mentioned on the Stony Fork branch of the 
Middlesborough Railroad to points of destination in the 
southeastern territory when tendered by said petitioners 
in such reasonable quantities as can be handled by said 
respondents , and it is so ordered. 

Archbald and Mack, Judges , dissent. 










. 









United States Commerce Court. 

No. 59. —April Session, 1912. 


Southern Pacific Company et al., petitioners, 

v. 

United States of America, respondent, 
Interstate Commerce Commission and Oregon 
& Washington Lumber Manufacturers’ 
Association, interveners. 


ON FINAL HEARING. 

For opinion of Interstate Commerce Commission, 
see 21 I. C. C. Rep., 309. 

Mr. F. C. Dillard , with whom Mr . IF. IF. Cotton, 
Mr. C. IF. Durbrow, and Mr. H. A. Scandrett were on 
the brief, for the petitioners. 

Mr. Blackburn Esterline, Special Assistant to the 
Attorney General, with whom Mr. Winfred T. Deni - 
son, Assistant Attorney General, was on the brief, for 
the United States. 

Mr. P. J. Farrell for the Interstate Commerce Com¬ 
mission. 

Mr. Joseph N. Teal, with whom Mr. Wirt Minor 
was on the brief, for the intervening shippers. 

Before Knapp, Presiding Judge, and Archbald, 
Garland, and Mack, Judges. 

48250—S. Doc. 7*9, 62-2-33 


513 




514 CASES BROUGHT IN THE COMMERCE COURT. 

[June 7, 1912.] 

Archbald, Judge: 

The rate involved in this case was fixed by the Com¬ 
mission on rough green fir lumber and lath from the 
Willamette Valley, Oreg., over the Southern Pacific 
Railroad to San Francisco city and bay points. The 
rate published by the carrier was $5 per ton, which 
applied to lumber of all kinds; and this on complaint 
the Commission sustained as to everything but the 
cheap grade named. This character of lumber, how¬ 
ever, it classified and gave a reduced rate of $3.50 per 
ton from points on the east side of the Willamette 
River, with 25 cents added from points on the west 
side. 

The same question was before the Commission in a 
previous proceeding, where rates of $3.40 and $3.65, 
respectively, were fixed. (14 Inter. Com. Com. Rep., 
61.) But upon being litigated in the courts it was 
finally decided by the Supreme Court on appeal that, 
according to the report of the Commission and the 
course of the proceedings before it, the rate had not 
been determined by a consideration of what was 
intrinsically just and reasonable for the service per¬ 
formed, but was reduced upon the theory that the 
lumbermen having been induced to enter the Willa¬ 
mette Valley on assurances of a low rate were entitled, 
on the ground of equitable estoppel, to be protected 
against an advance. (Southern Pacific Company v 


CASES BROUGHT IN THE COMMERCE COURT. 515 

Interstate Commerce Commission , 219 U. S., 433.) 
The contention now is that in disregard of that deci¬ 
sion, with admittedly no new facts before it, the Com¬ 
mission allowed the same views to prevail, merely 
raising the rate a fraction, so as to have the sem¬ 
blance of compliance, without really undertaking 
to determine what was a just and reasonable rate. 

It is declared by the Commission in the present 
report that, “ while a large amount of additional testi¬ 
mony was introduced” at the second hearing, bearing 
upon the issues involved, “ no new facts were devel¬ 
oped,” and that consequently no further discussion 
of the testimony was required. But this statement is 
not to be carried too far. And above all it affords no 
basis for the argument which is made that, taking the 
same view of the facts, the Commission allowed the 
same ideas to prevail, making the same disposition of 
the case as the result. The new evidence undoubt¬ 
edly was cumulative, and simply carried the case 
down to the time of the last hearing, thus presenting 
nothing new or different in kind from what had been 
previously shown, and that is evidently all that the 
Commission meant. But the consideration given to 
these facts by the Commission, as bearing on what was 
a just and reasonable rate, is clear, and sufficiently 
sustains the conclusion reached. 

As pointed out by the Commission the net earnings 
per mile of the Oregon & California Railroad while 
the $3.40 rate was in force were much in excess of 
those of many other strong roads; while the ratio 
of operating expenses to operating revenues was 


516 CASES BROUGHT IN THE COMMERCE COURT. 

materially less; this going to show that no serious 
consequences to the road would result from this 
supposedly low rate. Nor, as it is said, having 
regard to the average haul of this lumber, was the 
rate per ton per mile unjust, there being many 
instances where for corresponding distances lower 
rates were voluntarily put in force. Going on to 
discuss certain cases relied on by the carrier, in 
which it was charged that the Commission had 
allowed rates for the transportation of lumber with 
which the rate in question unfavorably compared, 
it was further pointed out that, in all but one of 
these, the conditions were not analogous, and in that 
one, all things considered, the rate of 14 cents per 
hundred pounds, while perhaps yielding more by 
reason of the low cost of transportation, was dis¬ 
tinctly lower in effect than the rate here prescribed. 
A recent instance investigated by the Commission is 
also alluded to, where the transportation of lumber 
for about the same distance as here involved was 
solicited by a prominent carrier, although its divi¬ 
sion amounted to but $1.40 per ton. And finally, 
having regard to the average load per car of rough 
green fir lumber and the average haul over the 
Oregon & California road, it was shown that the 
car mile earnings were 16 cents, while the average 
car mile earnings for all the roads of the United 
States for the year ending June 30, 1910, were but 
14.9; and that while the exact car mile earnings on 
all traffic of this road did not appear by the figures 
furnished by the company, yet an examination of 


CASES BROUGHT IN THE COMMERCE COURT. 517 

those figures indicated that the earnings on the 
lumber in question were nearly, if not quite, equal 
to the average, although considering the longer 
average haul they might well be less, from which 
there could be no doubt that the business at the 
rate prescribed yielded the carrier a handsome profit 
above the cost of transporting it. It is upon these 
and other considerations which are stated that the 
order of the Commission is expressly based. 

It is said, however, that the Commission does not 
stop with this, but goes on to reassert the right to 
consider the agreement made by the carrier by which 
the original $3.10 rate was put into effect, on which 
the lumber industry of the Willamette Valley was 
built up, in the face of the decision of the Supreme 
Court that it had no right to do this; and that, enter¬ 
ing into the action of the Commission as it so did, the 
order is void. This contention is based on the follow¬ 
ing observations in the report. Referring to the 
original agreement by the Southern Pacific that rates 
should be made to San Francisco which would fairly 
meet the water competition from Portland, it is there 
said: 

“The Supreme Court seems to have understood 
that the Commission was controlled largely by this 
consideration and that its real purpose was not to 
establish a rate just and reasonable, but rather to 
compel a performance of this agreement and prevent 
the inequity which would result from its viola¬ 
tion. * * * This Commission has never under¬ 

stood that it could dictate the policy of a carrier in 
the making of its rates, in so far as there was just 
room for the exercise of a policy. It has several 


518 CASES BROUGHT IN THE COMMERCE COURT. 


times explicitly so declared. We have, however, be¬ 
lieved that we might consider what the policy of a 
carrier had been in determining whether the rates 
resulting from a change in that policy were just and 
reasonable. It often happens that the very existence 
of an industry depends upon the rate accorded to it. 
If, now, a carrier has established a particular rate for 
the express purpose of enabling an industry to exist, 
and if, upon the strength of that rate, money has been 
invested which must be desto^ed if the rate is with¬ 
drawn, it has been our understanding that this fact 
might properly be considered in passing upon the 
reasonableness of the proposed change in the rate. 
Such fact is not controlling, but is one of the circum¬ 
stances which may properly be kept in view. It has 
been our opinion that we might in a proper case order 
the continued maintenance of a rate upon which the 
investment of money had been induced, even though 
we would not in the first instance, as an original propo¬ 
sition, have directed the establishment of that rate. 

“The policy of a railroad can not be dictated entirely 
by its own interest. It can not arbitrarily change that 
policy from day to day when those changes result in 
undue hardship to its patrons. The welfare of the 
public, as well as its own welfare, must be consid¬ 
ered. To that extent this Commission has believed 
that it might control the policy of carriers, and to 
that extent alone. It is still of the opinion that this 
must be so unless the property rights of shippers are 
to rest in the arbitrary whim of the carrier without 
the right of appeal to any tribunal. We do not under¬ 
stand that the Supreme Court in its decision has held 
the contrary. But in the present case, to avoid all 
possibility of question, it has seemed proper to lay 
entirely out of view everything which transpired 
between these parties in the nature of contract, 
agreement, or assurance. 

“After full hearing and upon full consideration of 
the whole matter we are of the opinion that the rate of 
$5 per ton, in so far as it applies to rough green fir lum¬ 
ber and lath, is unjust and unreasonable, and that 


CASES BROUGHT 11ST THE COMMERCE COURT. 519 

for the future the rate upon these commodities to 
San Francisco and bay points, as defined in the 
tariffs of the defendants, should not exceed $3.50 
per net ton of 2,000 pounds from points upon the line 
of the defendant east of the Willamette River, except 
from the Wendling branch, so called; and that rates 
from the Wendling branch and from stations upon 
the west bank of the Willamette River should not 
exceed $3.75 per net ton.” 

The Commission is entitled to have this taken 
exactly as it reads, and there can be no reasonable 
controversy as to what is so said. There is no sug¬ 
gestion, as before, that by reason of assurances held 
out to the lumber men the carrier was to be regarded 
as estopped, and, on the contrary, there is an ex¬ 
press repudiation of any such idea. The attempted 
vindication of the former ruling of the Commission 
was not necessary to the present decision and might 
appropriately have been omitted. But it is of no 
consequence unless it betrayed a contumacious pur¬ 
pose on the part of the Commission, which influenced 
its decision, and this it is plain could not be reason¬ 
ably asserted. Not only is there the explicit decla¬ 
ration that everything in the way of agreement or 
assurance had been put out of view, followed by the 
statement that upon full consideration the rate of 
$5 a ton as applied to rough green fir lumber and lath 
in the opinion of the Commission was unjust and un¬ 
reasonable, and for the future should not exceed the 
lower amount named; but the inducing reasons for 
this are given, as shown above, and sufficiently sus¬ 
tain the conclusion reached. The action of the Com¬ 
mission is thus put upon unexceptionable grounds, 


520 CASES BROUGHT IN THE COMMERCE COURT. 

which the observations and criticisms indulged in are 
ineffective to disturb. 

It is further said that there is no justification for 
classifying rough green fir lumber and lath from the 
Willamette Valley, all lumber as a rule, regardless 
of condition or value, taking the same rate between 
the same points, this being true also on shipments 
by rail from Portland, with which the Willamette 
Valley competes. There is no occasion for classifica¬ 
tion at Portland, as the Commission points out, the 
cheaper grades of lumber from there uniformly going 
by water, and the matter thus taking care of itself. 

It is said again, however, that this discloses the real 
purpose of the reduction on this grade of lumber, which 
is to bring the rate down to the level of water transpor¬ 
tation from Portland, with which it is thrown in com¬ 
petition, making the rate thus on its face unjust. It 
may be that the Commission had the necessities in this 
respect of the lumber industry of the Willamette Valley 
somewhat in mind, and that this to a certain extent 
influenced the result reached. But, as is pointed out 
by the Commission, rough green fir lumber and lath 
is the cheapest kind of lumber manufactured, the 
value per car load not exceeding one-half that of the 
better grades of dried and dressed. It can not move 
to market therefore from the Willamette Valley 
unless it gets an encouraging rate, without which, 
regardless of competition, it will be left in the woods, 
or be sent to the scrap heap and burned. It also 
loads heavier than dry lumber, the average of the one 
being 60,000 and the other 50,000 pounds to the car, 


CASES BROUGHT IN THE COMMERCE COURT. 521 

the discrepancy in the yield of freight per car being 
thus in part made up. Nor is a classification of 
lumber based on condition and value altogether 
unknown in transportation circles, exceptions, accord¬ 
ing to the exigencies of particular cases, being intro¬ 
duced at times by the carriers themselves. A lower 
rate than for the higher grades of lumber was thus 
apparently justified in the present instance by these 
considerations, if not indeed required, and the only 
question therefore is whether the reduction was 
unjust. 

In fixing the rate of $3.40 per ton on the former 
complaint, the Commission was no doubt guided in 
part by the Portland competitive water rate. This 
rate was met in the early stages of lumbering in the 
Willamette Valley by the $3.10 rate, given by the 
railroad, which at one time prevailed. Taking this 
as a basis, the Commission found that in later years 
water charters from Portland ranged from twenty- 
five to fifty cents per thousand more, and it was 
therefore considered that $3.40 by rail in comparison 
might reasonably be charged. On the present hear¬ 
ing this was raised to $3.50, the rate now fixed, a 
slight advance realizing about $3 additional per car. 
It may be that in this analysis water competition is 
given a somewhat prominent part. But not in our 
judgment to the extent of making the rate thereby 
reached per se unreasonable and unjust. It is in 
evidence that, regardless of competition, this cheap 
grade of lumber, as already stated, could not get to 
market from the Willamette Valley without a favor- 


522 CASES BROUGHT IN THE COMMERCE COURT. 

ing rate, and whether traffic will move at a given 
rate is always some evidence as to whether the rate 
responds to the value of the service performed. The 
Commission had this and the other matters to which 
reference is made to guide in the conclusion reached. 
The rate was thus not fixed arbitrarily or without 
considerations which justified it; and above all not 
for the purpose of enforcing a policy inaugurated by 
the carrier, which it was held could not equitably be 
abandoned; but in the exercise of due judgment, after 
full consideration of the entire subject, as shown by 
the reasons given for it; and this being so the order 
was lawfully made. 

The petition will therefore be dismissed with costs. 


United States Commerce Court. 


No. 60.— February Session, 1912. 


Baltimore & Ohio Southwestern Railroad Com¬ 
pany and Norfolk & Western Railway Com¬ 
pany, PETITIONERS, 

V. 

United States of America and Cincinnati & 
Columbus Traction Company, respondents. 

Interstate Commerce Commission, intervener. 


ON MOTION FOR PRELIMINARY INJUNCTION. 

For opinion of the Interstate Commerce Commis¬ 
sion, see 20 I. C. C. Rep., 486. 

Mr. Edward Barton , Mr. Theodore W. Reath , and 
Mr. R. Walton Moore , with whom Mr. Joseph I. 
Doran was on the brief, for the petitioners. 

Mr. Winfred T. Denison , Assistant Attorney Gen¬ 
eral, and Mr. Blackburn Esterline, special assistant to 
the Attorney General, for the United States. 

Mr. C. Bentley Matthews for the Cincinnati & Co¬ 
lumbus Traction Company. 

Mr. Charles W. Needham for the Interstate Com¬ 
merce Commission. 


523 





524 CASES BROUGHT IN THE COMMERCE COURT. 

Before Knapp, Presiding Judge, and Archbald, 
Hunt, Carland, and Mack, Judges. 

[April 9, 1912.] 

Archbald, Judge: 

This is a bill to set aside an order of the Interstate 
Commerce Commission. The proceedings before the 
Commission were instituted by the Cincinnati & 
Columbus Traction Company, an electric suburban 
railway, incorporated under the laws of Ohio, against 
the Baltimore & Ohio Southwestern Railroad and the 
Norfolk & Western Railway, two separate trunk lines 
running east and west across the State of Ohio. The 
proceedings were taken under the first section of the 
interstate-commerce act to compel a switch connec¬ 
tion at separate points with each of the railroads men¬ 
tioned, and also to secure through routes and joint rates 
under the fifteenth section. There was a prayer in 
the latter connection that the railroads be required 
to exchange cars and equipment. The Commission 
in a joint order against both roads substantially 
granted the relief prayed for. 

The provisions of the act with regard to the com¬ 
pelling of switch connections are as follows: 

“ Any common carrier subject to the provisions of 
this act, upon application of any lateral, branch line 
of railroad, or of any shipper tendering interstate 
traffic for transportation, shall construct, maintain, 
and operate upon reasonable terms a switch connec¬ 
tion with any such lateral, branch line of railroad, or 
private side track which may be constructed to con- 


CASES BROUGHT IN THE COMMERCE COURT. 525 

nect with its railroad, where such connection is rea¬ 
sonably practicable and can be put in with safety and 
will furnish sufficient business to justify the construc¬ 
tion and maintenance of the same; and shall furnish 
cars for the movement of such traffic to the best of its 
ability without discrimination in favor of or against 
any such shipper. If any common carrier shall fail 
to install and operate any such switch or connection 
as aforesaid, on application therefor in writing by any 
shipper or owner of such lateral , branch line of rail¬ 
road , such shipper or owner of such lateral , branch line 
of railroad may make complaint to the Commission, 
as provided in section thirteen of this act, and the 
Commission shall hear and investigate the same and 
shall determine as to the safety and practicability 
thereof and justification and reasonable compensation 
therefor, and the Commission may make an order, as 
provided in section fifteen of this act, directing the 
common carrier to comply with the provisions of this 
section in accordance with such order, and such order 
shall be enforced as hereinafter provided for the en¬ 
forcement of all other orders by the Commission, 
other than the orders for the payment of money.” 

The words in italics were not in the act at the time 
the application for the switches in question was made 
to the railroads, nor at the time of the complaint to 
the Commission, which followed, but were intro¬ 
duced over a year afterwards, in June, 1910, by way 
of amendment. At the time the proceedings were 
instituted, therefore, the traction company had no 
right to file the complaint, and the Commission, in 


526 CASES BROUGHT IN THE COMMERCE COURT. 

consequence, except for the change in the law, 
would have been without authority to entertain it. 
Interstate Commerce Commission v. D. L. & W. R. R., 
216 U. S., 531. After the testimony had been taken, 
however, and before any order had been entered, in 
March, 1910, immediately following the decision just 
cited, the case was reopened at the instance of the 
traction company to permit two shippers along the 
line of the road, one at Marathon and the other at 
Hillsboro, to be added as complainants. This was ob¬ 
jected to by the railroads on the ground that it could 
not overcome the want of jurisdiction when the case 
originated, and could not in any respect supply the 
necessary preliminary application in writing, which 
is required by the statute as the basis of the subse¬ 
quent proceedings. The Commission overruled the 
objection, and, having considered the case on the 
merits, made the following order: 

“ This case coming on to be further considered, and 
it appearing that the parties in interest have failed 
to put in effect the findings made by this Commission 
in its report herein, dated March 14, 1911, and that 
the above-named complainant petitions by counsel 
for an order of relief in the premises: 

“ It is ordered that defendant The Baltimore & Ohio 
Southwestern Railroad Company be, and it is hereby, 
notified and required to construct, on or before the 
15th day of February, 1912, and thereafter to main¬ 
tain and operate during a period of not less than two 
years, a switch connection for the transfer of inter¬ 
state traffic to and from the line of the above-named 


CASES BROUGHT IN THE COMMERCE COURT. 527 

complainant company at Madeira, Ohio, the expense 
of installing such connection to be borne by said 
complainant. 

“It is further ordered that said defendant The 
Baltimore & Ohio Southwestern Railroad Company, 
be, and it is hereby, notified and required to con¬ 
struct, on or before the 15th day of February, 1912, 
and thereafter to maintain and operate during a 
period of not less than two years, a switch connection 
for the transfer of interstate traffic to and from the 
line of the above-named complainant company at or 
near Hillsboro, Ohio, the expense of installing such 
connection to be borne by said complainant. 

“It is further ordered that defendant Norfolk & 
Western Railway Company be, and it is hereby, noti¬ 
fied and required to construct, on or before the 15th 
day of February, 1912, and thereafter to maintain and 
operate during a period of not less than two years, a 
switch connection for the transfer of interstate traffic 
to and from the lines of the above-named complainant 
company at or near Hillsboro, Ohio, the expense of 
installing such connection to be borne by said com¬ 
plainant. 

“ And it is further ordered that defendants The 
Baltimore & Ohio Southwestern Railroad Company 
and Norfolk & Western Railway Company, according 
as their various lines may run, be, and they are here¬ 
by, notified and required to establish and put in force, 
on or before the 15th day of February, 1912, and for a 
period of at least two years thereafter to maintain, 
through routes to and from interstate points to and 


528 CASES BROUGHT IN THE COMMERCE COURT. 

from all points on the complainant's line between and 
including Boston and Dodsonville, in the State of 
Ohio, in order that shippers at and between those 
points may have access to and from interstate points 
by interchange of cars under through billing and 
through charges based upon the rates of the respective 
carriers herein to and from the junction points estab¬ 
lished by this order, the complainant carrier having 
filed its local rates with this Commission as applicable 
to interstate movements over such through routes." 

Several objections are made to this order. In the 
first place, renewing the one made before the Com¬ 
mission, it is contended that the introduction, while 
the case was pending before the Commission, of 
entirely new and different complainants, who had 
made no previous application for the switches, was 
beyond the power of the Commission to allow, and 
vitiates the proceedings. An initial application in 
writing from the party entitled to make it at the 
time is essential, as it is said, in order to comply 
with the statute, and can not be dispensed with nor 
afterwards supplied, and, with all that has been done, 
is still lacking. Nor is this met, as it is urged, by 
the suggestion that the Commission is an administra¬ 
tive body not hampered by rules, and thus compe¬ 
tent to reform the proceedings in the way which was 
done to meet the exigency. 

It was also further objected that the Commission 
failed to determine the compensation to be severally 
made to the railroads for the switch connection with 
each which was ordered, having simply directed that 


CASES BROUGHT IN THE COMMERCE COURT. 529 

the expense of installation should be borne by the 
traction company, without more, although the 
statute requires that, along with the question of the 
safety, practicability, and justification for the switch 
connection, the Commission shall determine the 
reasonable compensation for it. 

And it is finally objected that, in excess of its 
powers or even of Congress itself to require (Central 
Stock Yards Co. v. Louisville & Nashville R. R ., 
192 U. S., 568; Same v. Same, 212 U. S., 132), the 
Commission ordered an interchange of cars along 
with through billing. 

These are serious objections which would have to be 
carefully considered except for the conclusion which 
we have reached on the underlying question, viz, 
whether the traction company’s road is a “ lateral, 
branch line of railroad” within the meaning of the 
statute, which, if found against that company, is con¬ 
clusive. 

The Cincinnati & Columbus Traction Company 
was organized and is operated under the laws of Ohio 
as an electric interurban railway and is classified 
by those laws with street railways, by the provisions 
for which, and not those for steam railroads, it is con¬ 
trolled and regulated. It was chartered to con¬ 
struct a line of this character from Cincinnati to Co¬ 
lumbus, something over a hundred miles, which has 
actually been built from Norwood, a suburb of Cin¬ 
cinnati, to Hillsboro, about half the distance. It is 
a common carrier of persons and property, and is also 
engaged in the transportation of express matter. 

48250—S. Doc. 789, 62-2-34 


530 CASES BROUGHT IN THE COMMERCE COURT. 

The Baltimore & Ohio Southwestern Railroad is a 
consolidated corporation organized under the laws of 
Ohio and Indiana, and operating an eastern and west¬ 
ern trunk line, through and across those States, into 
and through the State of Illinois, and also into the 
State of Kentucky. It reaches Hillsboro by a branch 
line which connects with its main line, running to 
Cincinnati. 

The Norfolk & Western Railway is organized un¬ 
der the laws of Virginia and operates a line of railway 
extending through parts of Ohio, West Virginia, 
Kentucky, Maryland, North Carolina, and Tennessee. 
It also has a branch line to Hillsboro, which connects 
with its main line to Cincinnati. 

In relative position to the line of the Cincinnati & 
Columbus Traction Company the Baltimore & Ohio 
Southwestern is to the north and the Norfolk & 
Western to the south of it, the traction company’s 
railroad being intermediate between the two and 
substantially dividing the diamond-like section of 
territory lying in between them. At Norwood the 
station of the traction company immediately adjoins 
that of the Baltimore & Ohio Southwestern, and for 
about six miles east from there its line not only 
parallels but is contiguous to the right of way of that 
railroad, while a few miles further on, at Perinton, 
it practically adjoins the right of way of the Norfolk 
& Western, which it similarly parallels for about four 
miles to Stonelick; and at the other or eastern end, 
for a distance of some four or five miles, at Hillsboro, 
it again parallels the tracks of the Baltimore & Ohio 


CASES BROUGHT IN THE COMMERCE COURT. 531 

Southwestern, the rights of way of the two roads 
being immediately adjacent. 

As found by the Commission in its report, the com¬ 
munities common to the traction company and the 
railroads at the eastern end of the line in the vicinity 
of Hillsboro are reasonably well served by those roads 
with respect to interstate shipments; and the same is 
true also of the places at the other end, from Stone- 
lick westward, some of which are within a stone’s 
throw of either the Norfolk & Western or the Balti¬ 
more & Ohio Southwestern. But at Boston, to the 
east of there, a town of some five hundred inhabit¬ 
ants, the distance is about five miles by the country 
roads to Batavia and something less than that to 
Baldwin, both of them stations on the line of the 
Norfolk & Western, and not less than eight miles to 
the nearest station on the Baltimore & Ohio South¬ 
western, while Dodsonville, a town of one hundred 
and fifty people, still further east towards Hillsboro, 
is also some four or five miles away from any station 
on the Baltimore & Ohio Southwestern and as much 
as eight miles from the nearest station on the Norfolk 
& Western. And between Boston on the west and 
Dodsonville on the east, a distance of about twenty 
miles, there are several villages, the largest of which 
is Fayetteville, with seven hundred inhabitants, which 
are from five to twelve miles distant from one or the 
other of the steam roads in question. 

Conceiving that the first set of places described 
were sufficiently served in interstate commerce by 
the Norfolk & Western Railway or the Baltimore & 


532 CASES BROUGHT IN THE COMMERCE COURT. 

Ohio Southwestern Railroad, the Commission de¬ 
clined, so far as they were concerned, to make any 
order establishing through routes or joint rates be¬ 
tween the steam roads and the traction company. 
But, on the other hand, this not being the case 
between Boston and Dodsonville, by reason of the 
distance from the steam roads, approximating not 
less than five miles in each instance, through routes 
and joint rates were established, and a switch con¬ 
nection given to make this effective. This connec¬ 
tion was directed to be made, as to the Baltimore & 
Ohio Southwestern Railroad, at or near Hillsboro on 
the eastern end, and at Madeira, a few miles out of 
Norwood, on the western; and as to the Norfolk & 
Western at Hillsboro only, nothing being said as to any 
connection with it to the westward. The exact points 
where the connections should be made were not indi¬ 
cated, but the feasibility of connecting in each in¬ 
stance is asserted, in view of the fact that when the 
traction road was in process of construction, ten or 
more years ago, there was such a physical connection 
with the one road at Madeira on the western end 
and with both roads on the eastern end at a point 
spoken of as Hillsboro Junction. It is intimated 
that if the parties can not agree as to the specific 
place for making the connection in each case, a more 
definite order will be entered. 

In considering whether upon this showing the Cin¬ 
cinnati & Columbus Traction Company is a lateral 
branch railroad, within the meaning of the law, it is 
to be observed that, according to the test applied by 


CASES BROUGHT IN THE COMMERCE COURT. 533 

the Commission, it is held to be such as to places and 
shippers along its line in the intermediate territory 
between Dodsonville and Boston, remote from and 
not sufficiently served by the trunk lines, but not as 
to those east or west of there, as the road approaches 
its termini, where this is not the case. But it is 
obvious that this is not and can not be the correct 
criterion. A road is or is not a lateral branch rail¬ 
road, according to the relation which it bears to the 
line with which a switch connection is asked. And 
this relation is one of road to road, and not of ship¬ 
pers or territory. A road, in other words, does not 
have the character of a branch or lateral road as to 
some shippers and territory and not have it as to 
others. There is no such dividing up or limiting it, 
nor can it be of that shifting kind. Looking to the 
purpose of the law, a road is a lateral branch road 
when it is tributary to and dependent on another for 
an outlet; that is to say, where it is essentially a 
feeder, contributing traffic and capable of interchang¬ 
ing it therewith. It is not such where it is in effect an 
independent and competing line. Nor is this any 
less the case because it may not compete as to a 
portion of the territory involved. It is the general 
effect which decides, and that is not in doubt here. 
All three roads in the present instance have the same 
general east and west direction, and, so far as con¬ 
cerns Hillsboro on the east and Cincinnati or Norwood 
on the west, run between the same points. For half 
this distance also one or other of the steam roads 
draws its local traffic from and serves substantially 


534 CASES BROUGHT IN THE COMMERCE COURT. 

the same territory as the traction company. And so 
clearly are they, within the limits named, competing 
lines, that admittedly any attempt to consolidate the 
traction company with either of them w T ould offend 
against the State if not the Federal law. Neither is 
it every carrier that is entitled to a switch connection 
with every other. As is said in the Rahway Valley 
Railroad case (216 U. S., 531), “The object was not 
to give a roving commission to every road that might 
see fit to make a descent upon a main line.” It is 
the dependent or tributary character which gives 
rise to the right, and that is not determined by mere 
proximity or terminal approach, or the fact that the 
road seeking a connection has come to the end of its 
line. The contrast in the statute is with a private side 
track constructed to connect with an interstate carrier, 
with which a lateral branch road is thus associated 
and presumably intended to be compared. The point 
here is that the traction company’s road, instead of 
being dependent or tributary, is in its own peculiar 
sphere, and, as to both the steam roads, an equal, 
independent, and competing line. Nor is this affected 
by the fact that as at present constructed it extends 
no further than Hillsboro or Norwood, and that upon 
the arrival at either of these places its carriage of 
persons or property is at an end. This is true even 
of a trunk line, when its terminus is reached, without 
thereby making out the necessary relation by which a 
switch connection with another road is able to be 
compelled. It may be that some shippers along the 
line of the traction company’s road are not so fully 


CASES BROUGHT IN THE COMMERCE COURT. 535 

accommodated as they might be, as the case stands; 
and their heeds are to be consulted to a certain extent 
without doubt. But this is not controlling,"and their 
rights have necessarily to be worked out through the 
road for which in each instance a switch connection 
is sought, the character of which as a lateral branch 
line is only incidentally affected thereby. Without 
undertaking therefore to further define a “ lateral 
branch line of railroad,” we are clearly of opinion that 
the road of this traction company does not come 
within any reasonable meaning of the language used 
in the statute to describe the class of roads entitled 
to a switch connection. And if we are right in this 
view, the Commission was without jurisdiction to 
make the order in question. 

A preliminary injunction was therefore properly 
ordered and the motion to dismiss will be overruled. 


. 

. 






. 







United States Commerce Court, 


No. 65.— June Session, 1912. 


Chamber of Commerce of City of Augusta, 
Georgia, petitioner, 
v. 

United States of America and the Interstate 
Commerce Commission, respondents. 


on motions to dismiss. 

For opinion of the Interstate Commerce Commis¬ 
sion, see 22 I. C. C., 223. 

Mr. John B. Daish, with whom Mr. E. G. Kalb - 
fleisch was on the brief, for the petitioner. 

Mr. Winfred T. Denison , with whom Mr. Thurlow 
M. Gordon was on the brief, for the United States. 

Mr. Chas. W. Needham for the Interstate Commerce 
Commission. 

Before Knapp, Presiding Judge, and Hunt, Car- 
land, and Mack, Judges. 

[June 7, 1912.] 

Mack, Judge: 

Petitioner seeks the annulment of the action of 
the Interstate Commerce Commission in dismissing a 
complaint alleging that the rate of $2.10 per ton on 

537 





538 CASES BROUGHT IN THE COMMERCE COURT. 


coal from Coal Creek mines in Tennessee to Augusta, 
Georgia, in force since October 1, 1907, was unjust 
and unreasonable in itself and subjected the manu¬ 
facturers of Georgia to undue prejudice as compared 
with other designated points in the same general 
territory. In dismissing the complaint the Commis¬ 
sion denied reparation. 

That the Commission proceeded in all respects 
according to law in the hearing of the case, and that 
there was substantial evidence in support of its 
conclusions is not denied. The petitioner, however, 
alleges that the Commission erred in matters of law 
apparent on the face of the report in dismissing the 
complaint and in denying the relief prayed. On 
oral argument it was conceded that no one of the 
alleged errors of law would, of itself, be a sufficient 
basis to annul the order of the Commission, but it 
was urged that in some way this court could amalga¬ 
mate all the charges of alleged error and deduce 
therefrom some sufficient new ground not specified 
which would require it to set aside the order of 
dismissal. 

In view of the admissions of counsel, we deem it 
unnecessary to discuss the alleged errors in detail. 
In our judgment, neither any one of them nor all of 
them combined confer upon this court either the right 
or the duty to annul the Commission's order. 

The motions of the respondents to dismiss the peti¬ 
tion will therefore be sustained , and the petition will be 
dismissed at the petitioner’s cost. 

Petition dismissed. 


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